Tullow Oil ($TUWOY), one of the UK’s leading independent oil and gas explorers and producers, was up four percent on the pink sheets on Friday to $8.33 per share on news that the company had finally hit pay dirt off of the coast of Norway.
The news is significant if only for the fact that during 2013 alone, the company has attempted 10 other such wells in various areas throughout the world, to no avail. With a market cap of $15 billion, Tullow is less like one of the US oil majors such as ExxonMobil (XOM) or Chevron (CVX) , and more like Marathon Oil (MRO) or EOG Resources (EOG) .
The discovery announced today is located in the Barents Sea, just above the tip of Scandinavia and the western coast of Russia. In concert with partners OMV AG and Statoil ASA (STO) , Tullow has made what it is calling a “breakthrough” discovery of oil; indeed, the Hoop-Maud basin where the new well is located could contain anywhere between 60 and 120 million barrels of crude.
Last year, Tullow acquired Spring Energy AS for $372 million, but until today’s announcement the company had come up empty on drilling projects in Mozambique and elsewhere. But the Norwegian off-shore discovery could also dovetail nicely with the Tullow’s more recent revelation that it had purchased itself a stake in Australian energy firm Pancontinental Oil & Gas NL (PCOGF) .
Heading towards the end of the regular trading session, Pancontinental was up over 30 percent on the pink sheets to $0.085 per share, but Statoil fared better with a 1.4 percent bump to $22.45 per share.
[Image Courtesy of Wikimedia Commons]