Tethys Well Disappoints; Still Hopeful

PUBLISHED: 13 Oct 2012 @ 00:16 | Comments (0) | More info about Kenneth G. Mondero

Shares of Central Asia-focused oil and gas explorer and producer Tethys Petroleum Limited (LSE:TPL) lost a sixth of its value earlier today as the market dumped shares following the company’s unfortunate news that its most recent exploration and appraisal well failed to duplicate the successes of the other wells drilled on the Akkulka Block in Kazakhstan.

The AKD07 well, drilled a month ago to supposedly find some 128 million barrels of hydrocarbon and extension of the producing Doris oilfield, was assessed to be “water-bearing” despite encountering the same Doris reservoir sand and another reservoir sand designated as “Dyna”, which were both present in “good quality”.

Nearly two kilometres away, the first discovery wells have successfully been tested at combined rate of 2,941 barrels of oil per day.

Tethys’ latest estimate of hydrocarbon resource within its Kazakhstan licence stands at 1.23 billion barrels, as independently assessed.

The AIM-listed firm slid 17.1% to 31.50 pence by 1:30 PM GMT at a volume of 3.5 million shares, following the announcement.

No Giving Up

Nonetheless, Tethys is still to continue drilling through its target depth to “fully assess the potential” of the target reservoirs, which they expect to be done by next week.

“We will obviously continue to assess this well as we drill towards the final TD (true depth) and also assess the other prospects in the area,” stated Tethys Chairman and President, Dr. David Robson.

Dr. Robson also hinted in his statement that the company is still hopeful it will be able to strike oil by further exploring the surrounding area as while the AKD07 well returned water, drilling and electric logs indicate the presence of oil.

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