POSITIVE NEWS from drilling operations in Africa boosted Tullow Oil's share price by close to 20 per cent yesterday.

Tullow announced that drilling results from its Hyedua-2 well off the coast of Ghana and its Kingfisher interest in Uganda indicate that the company can increase its estimates of the oil contained in both fields. The company said that the Hyedua well contained "55m (180ft) of quality oil-bearing reservoir sandstones".

Its statement added that it plans to begin testing to determine the well's potential production rates.

In Uganda, drilling in its Kingfisher Three indicated that it holds oil and is connected to proven reserves in Kingfisher One and Two.

Tullow's price jumped by €1.12 to €6.80 in Dublin, a rise of 19.7 per cent, on the back of the news.

In London, the Irish company made similar strides, adding just over 20 per cent to close at 596.5 pence.

Reacting to the news, Job Langbroek, Caren Crowley and James McCullough, analysts at Dublin stockbroking firm Davy, said that at an oil price of $50 a barrel, the new discoveries valued Tullow at 516p a-share, and at $85 a-barrel, they said the stock would be worth over £11.

Oil surged by close to 10 per cent yesterday to $48.75 a-barrel after Opec, a cartel made up of leading petroleum producing countries, signalled that they are going to cut output.

Oil prices have fallen by close to 60 per cent from the highs they hit in July, but are expected to gain ground in the medium term.