another elephant find by tullow near gbp

" Tullow finds big Uganda oil well


By Pat Boyle

Thursday May 07 2009

Tullow Oil said yesterday that it had made a substantial oil discovery on the Nsoga-1 exploration well in the Butiaba region of Uganda Block 2.

The well was drilled six kilometres from the crest of the Nsoga prospect, on the flank of the structure. It hit a three-metre oil column which is expected to thicken to about 43 metres at the centre of the structure.

Described as "an early appraisal well", it maintains Tullow's 100pc strike rate with exploration drilling in the region. The new find could contain up to 100 million barrels of oil.

A separate pay zone consisting of a 12-metre section of thin-bedded oil bearing sands was also encountered above this main oil bearing zone.

Nsoga-1 was the seventh successful test in the area and Tullow said the result "de-risks" several other prospects nearby.

The well is now being suspended as a future oil producer and on completion of operations the rig will move to test the Awaka prospect, with drilling operations scheduled to commence this month.

Stockbroker Davy said in a note that the find added 10p per share to its valuation of Tullow, which is now estimated at 1249p a share based on an oil price of $85 per barrel.

"The well result adds more oil resources to the basin inventory, which is now comfortably over the 500m barrel economic threshold," it added.

Tullow's exploration director Angus McCoss said: "This was a bold step, taken with the confidence gained through our 100pc success rate in Uganda and our proven exploration methods."

- Pat Boyle "