Irish exploration companies strike oil in South America and Africa

Irish exploration companies strike oil in South America and Africa

Two Irish exploration companies are at the centre of significant oil finds in South America and Africa.

Shares in Irish-founded Tullow Oil surged by as much as 20% in London, where it is most heavily traded, and by more than 5% in Dublin on the back of it announcing a "substantial and high value" oil discovery off the coast of Guyana in South America.

Tullow's chief executive Paul McDade described the find as "an excellent start to our drilling campaign in the highly prolific Guyana oil province".

Tullow will follow this up with drilling two more prospects, this year, in South America.

Meanwhile, additional oil has been found after recent drilling at two wells at the onshore Abu Sennan concession in Egypt. Irish exploration company United Oil and Gas recently agreed to buy a 22% stake of the concession via its €14m acquisition of Egypt-based Rockhopper Energy.

Trading in United's shares have been temporarily suspended since the deal was announced - on account of AIM rules around reverse takeover deals. The transaction is expected to close in the final quarter of this year.

"The Rockhopper [oil find] announcement is excellent news and further proof of the quality of the assets that we are purchasing," said United's chief executive Brian Larkin.

"While the well is still testing, we are confident that these results can increase reserves and help add to production on the licence," he said.

Mr Larkin recently described the Egypt deal as being potentially "transformational" for United Oil, which entered Africa in March by signing an option agreement to invest in an onshore licence in Benin.

Last month United struck a deal whereby BP will have first call on any oil and gas produced from the Irish company's other licences in the UK, Jamaica and Italy.

Elsewhere, British explorer Europa Oil and Gas, which is heavily focused on offshore Ireland, has been awarded a 12-month extension to one of its frontier exploration licences off the west coast of Ireland. Europa is seeking development partners for its Irish licences ahead of drilling "at the earliest opportunity".

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