News of the discovery of what could be Uganda's largest oil field has paid huge dividends for Tullow Oil and Heritage Oil, the two companies that own the prospect in western Uganda.
Heritage and Tullow, 50-50 owners of the Buffalo-1 oil well in the Butiaba region just off Lake Albert, yesterday announced the successful testing of the well. They said the oil and gas deposits discovered could turn the Buffalo-1 well into Uganda's largest oil field.
In reaction to the news, shares in the Tullow on the London and Dublin stock exchanges surged 8.5 percent yesterday. The rise was Tullow's highest since October.
According to the Dublin-based Independent newspaper, Tullow's shares have shares have jumped 33 percent in the past month, rising by 20 percent in the past week alone as excitement over the Ugandan drilling came to a head.
The Tullow Chief Executive Officer, Aidan Heavey, said with many prospects still to drill in the Butiaba region, he is certain that the commercial threshold for development should be exceeded soon. He said a dedicated team has been assigned to deliver a commercial development plan for the overall basin.
Tullow may exceed its reserves target at Uganda's Lake Albert fields after stepping up exploration to make an extraction project viable.
It needs to find 400 million barrels of oil reserves at a price of about 80 dollars a barrel, or 500 million barrels at 60 dollars a barrel, to start production at the fields. The indicated pre-drill estimate for the Buffalo-1 well is in excess of 344 million barrels of oil.