Tullow Oil Suspends Ngassa 1, Redrills from Other Location

Tullow Oil reported that the Ngassa-1 exploration well in Block 2 Uganda commenced drilling on 17 November 2007 and the well has reached a total depth of 1,635 metres. Due to persistent borehole instability, Tullow has decided to suspend the well and redrill from an alternative location.

Drilling difficulties on Ngassa-1 were accentuated by the necessary high-angle deviation of this long-reach well through thick claystones close to a major fault zone. The well trajectory was selected on the best available 2D seismic data and on the basis of the location's minimal environmental footprint.

Whilst drilling the shallow section, the well discovered six net metres of gas bearing sands. The thick claystone seals encountered provide good encouragement about the underlying oil prospectivity.

The substantial primary and secondary oil objectives remain undrilled so it is now planned to redrill the well from a location where subsurface conditions are expected to be more benign. The new well design will benefit considerably from the recently acquired 3D seismic and the information gained in the first hole. This information, combined with the new location, will enable the well to be drilled with a less acute trajectory and to be steered clear of identified faults. Options include a near term onshore deviated well and an offshore vertical well.

The Nabors 221 rig will now be moved to Block 3A to drill the Kingfisher-2 well during the second quarter of the year.

Aidan Heavey, Chief Executive of Tullow said, "The discovery of oil in the Odum well continues the success of our exploration campaign in Ghana. This commercial discovery is located only 13 kilometres from the larger Jubilee Field and has opened up a new prospective play in the region. While the technical challenges associated with the Ngassa well are disappointing, it remains a valid high impact prospect and the new location, 3D seismic and experience of drilling Ngassa-1 should enable us to successfully drill it as part of Tullow's Lake Albert Rift Basin campaign."