Tullow strikes oil in Ugandan well

Dublin-listed explorer Tullow revealed yesterday that it had struck oil in one of its African properties.

The company said that exploratory drilling in its Mputa 1 well in Uganda recovered oil samples at a depth of 965m (3,166ft), and further evidence of either oil or gas at a lower level.

Tullow is not likely to declare the well commercial at this stage. But chief executive Aidan Heavey said that the real significance of the find was that it proved the existence of an oil system where the well is located in the Albertine Basin.

Tullow owns 50 per cent of the oil interests in the basin, and its Australian partner, Hardman Resources, holds the other half.

Mr Heavey said the news gave a positive indication for the wells it intended drilling in two further blocks.

"While it is too early to determine the size of potential commerciality of Mputa-1, the results significantly reduce the risk of the prospects mapped in blocks 2 and 3A," he said.

Investors reacted well to the news, and the share price rose eight cent to close at €4.48 yesterday.

Job Langbroek and Caren Crowley, analysts with Tullow's broker, Davy Stockbrokers, said it reduced the risks associated with the new wells it intended drilling.

They said the larger prospects the company intends drilling next should be viewed with more confidence.