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Dominion Petroleum receives Ngaji-1 drilling permit in Uganda

Dominion Petroleum (AIM: DPL) has received a drilling permit for Ngaji-1, the company’s first exploration well in Uganda, in the highly prospective Exploration Area Block 4B (EA4B). The drilling permit was issued by Uganda's Department of Petroleum Exploration and Production (PEPD).

Ngaji-1 will be the first well to be drilled in the Lake Edward basin.

"We are very pleased to have received our formal drilling permit from the Government of Uganda in such a timely fashion”, Dominion chief executive Andrew Cochran commented. "With preparations well under way, we are now moving rapidly towards initial drilling in June and possibly more seismic to follow later in the year".

Dominion said it is implementing a comprehensive programme to address all social and environmental matters associated with the drilling of the well.

"Having reviewed Dominion's application for consent to drill the Ngaji-1 well, we are satisfied it addresses the requirements for issuance of consent.  We therefore have no objection to Dominion's drilling of the well and wish them every success", PEPD Commissioner Ernest Rubondo stated.

After raising £32.7 million in an institutional placing in early March, Dominion has accelerated the commencement of its 2010 exploration programme - which marks the company’s most active period in its corporate history. The 2010 programme will include drilling and 3D seismic acquisition at Dominion’s African projects.

Also last month, Dominion secured a rig from Oil and Gas Exploration Cracow (NYSEMKT:OGEN) to drill Ngaji-1. The Ngaji prospect boasts unrisked recoverable reserves of 100 mmbbls (million barrels) of oil, and this first well will assess the prospect and evaluate the basin’s hydrocarbon potential.

The well is located in an area comparable to that of the Buffalo-Giraffe discovery in Exploration Area 1, reported to contain around 400 mmbbls of recoverable oil, Dominion said previously in a statement. Should the well be successful, Dominion will step up its exploration and appraisal activities in EA4B and potentially the neighboring Block 5 in DR Congo.

Activity in the offshore East African margin is ramping up also with the announcement of a significant discovery by Anadarko Petroleum offshore northern Mozambique In February.

Disclosure: The author holds no positions in the company