Africa Oil says speeds up E. Africa exploration, drills new well

NAIROBI, July 25 Thu Jul 25, 2013 2:11am EDT

NAIROBI, July 25 (Reuters) - Canadian explorer Africa Oil Corp said on Thursday it had begun drilling a new well in Kenya with its British partner Tullow Oil Plc, as the two companies speed up exploration efforts in the east Africa region.

East Africa has become a hotbed of exploration after oil discoveries in Kenya and Uganda and huge gas finds in Tanzania and Mozambique. However, Kenya has yet to determine whether it has commercially viable quantities of hydrocarbons.

Drilling of the Ekales-1 well, located within Kenya's Lokichar basin, started on Monday. Its planned depth is 2,500 metres and it would take approximately two months to drill and evaluate its content, Africa Oil said.

"The Ekales prospect is probably one of the lowest risk prospects in our inventory. The proximity and similarity to the existing Ngamia and Twiga discoveries give us a high degree of confidence that we will find oil and continue to build the discovered resources necessary for commercial volume threshold," Keith Hill, Africa Oil's chief executive, said in a statement.

Earlier this month, Tullow said it saw a flow rate potential of 5,000 barrels a day based on Ngamia-1 and Twiga-South-1, and estimated combined mean associated resources for the discoveries were 250 million barrels of oil, a forecast it said could increase further after appraisal.

The Ekales-1 prospect is located approximately 15 km northwest of the Ngamia discovery and 7 km south of the Twiga discovery, Africa Oil said.

Ekales-1 on onshore block 13T is a joint venture between Tullow, the well operator with 50 percent of the exploration licence, and Africa Oil.

Buoyed by oil finds in Kenya's Ngamia, Twiga and Etuko wells, Hill said Africa Oil and Tullow Oil planned to speed up their exploration efforts in the east Africa region, including the Horn of Africa.

"Our pace of exploration and appraisal continues to accelerate with the anticipated arrival of three additional rigs in Kenya and Ethiopia in the next 60 days for a total of six rigs, four of which will be operated by Tullow Oil," he said.

"The recently announced Etuko discovery, on the flank of the Lokichar basis has opened a new play fairway and provided further confirmation of the world class potential of the Lokichar Basin."

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