Tullow ups estimates for Kenyan well after drilling
Tullow Oil, the largest company listed on the Irish stock exchange, raised its estimate of Kenya's first oil discovery at the Ngamia-1 well after drilling more than halfway to the planned target depth.
The shares of Africa Oil, its partner in the site, surged. Tullow, the oil company with the most licences in Africa, encountered more than 100 metres of net oil pay "across multiple reservoir zones" after drilling 1,515 metres, the London-based company said.
Tullow initially announced on March 26 that it had found more than 20 metres of net oil pay after 1,041 metres of drilling.
Oil and natural-gas explorers have taken notice of East Africa, which sits on the Great Rift Valley, spurred by the discovery of oil in Uganda in 2006, deposits in Tanzania and Kenya's recent find.
While Tullow plans to start small-scale oil production this year in Uganda and Tanzania produces gas from two offshore fields, no commercial discoveries have been made yet in Kenya.
The Ngamia-1 well in Block 10BB will now be drilled to about 2,700 metres, Tullow said.
The concession is operated by Tullow in a 50-50 venture with Vancouver-based Africa Oil, whose shares climbed as much as 46pc to C$8.47 (€6.52), the highest level since October 1996. Tullow shares didn't trade yesterday in London due to the bank holiday.
It's too early to tell if the deposit is economically important though the early results offer "encouraging" signs, the Kenyan prime minister's office said. "Exploration campaigns can last several years."