FTSE 250 oil explorer Tullow Oil (TLW) is up 3.2% to 198.1p as it finds oil with ‘wildcat’ drilling on its Block 12A in northern Kenya. A nice little advance but actually a pretty lacklustre response to a well – Cheptuket-1 - which effectively opens up a new basin for the company.

Clearly the market is not ready to get excited about exploration again. It is still clinging to understandable concerns over the additional cost, time and risk associated with appraisal and development and the possibility that in the current climate an explorer might not able to monetise their discoveries.

To put this into context when Tullow announced a strong result from the wildcat Mahogany-1 well on 18 June 2007 its shares rose more than 12% on the day. Further drilling uncovered Tullow’s biggest ever find – Jubilee – and there is no suggestion this well is comparable in terms of scale but the disparity is still striking.

Even Tullow is remaining pretty circumspect. ‘We believe this encouraging initial result has the potential to open up a second prolific basin in Kenya,’ it says but adds the pace of follow-up activity is ‘set to be modest’.

Issue Date: 16 Mar 2016