The group said that following unconditional approval of the farm-out by the Tanzania government, it expects to receive the US$20 million cash for the stake from oil group Mubadala Oil & Gas on December 15.

Mubadala Oil & Gas has exploration and production interests in the Middle East, North Africa, and Central and Southeast Asia. 

Dominion added it plans to acquire 2-D seismic data on Block 7 in early 2012.  

At least 1,000 square kilometres of data will be acquired further offshore than last year's 3D survey to define additional prospects in the deeper water portion of Block 7. 

The 2D survey is also intended to aid refinement of the partial relinquishment pattern for Block 7 that is required at the end of the first Period of this licence, Dominion added.

Andrew Cochran, Dominion’s chief executive said: “Mubadala's participation has validated the prospectivity of the acreage and our work on the Block to date. In Mubadala, we have a partner with considerable resources as well as exploration and commercial expertise."

In October, Dominion recommended an all share offer from Ophir Energy (LON:OPHR) worth 5.9p per share and that valued the shares and convertible loan notes of Dominion at £118.2 million.

Formal submissions were made to the Kenyan Competition Authority and the Tanzanian Fair Competition Commission and the consent of the Republic of Kenya's Minister of Energy for clearance for the acquisition in November.

Are we finally starting to see the first signs of consolidation in the oil exploration and production sector?

With two deals in two weeks it is difficult to say definitively whether we are on the cusp of something big. 

However the tectonic plates certainly feel like they are shifting.

Today we saw Ophir Energy (LON:ORHR) making its move with a £118 million, mainly paper bid  for Dominion Petroleum (LON:DPL).  

It follows Premier Oil’s (LON:PMO) tilt for its joint venture partner EnCore Oil (LON:EO.) last week. 

There is also a trend of consolidation at project level too with larger firms acquiring significant stakes in prospective acreage where the juniors have laid the groundwork.

Notable farm-ins deals of this nature include BP’s (LON:BP.) partnership with Chariot Oil & Gas (LON:CHAR) in Namibia and French major Total’s tie-up with and Cove Energy (LON:COV) in Kenya. 

Indeed Dominion last week was part of this merry-go-round of deals when it sold a 20 per cent stake in its lead asset, the Tanzania Block 7 licence, to an Abu Dhabi oil firm for US$20 million.

In part, this theme has emerged as a reaction to the knock-down asset valuations implied by the current stock prices.

Indeed the Dominion deal reveals that industry players place a far higher price on these assets than investors currently do. 

Ophir’s offer represents a whacking 64 per cent premium to last night’s closing price. 

But it seems it is a price worth paying for a significant position off the coast of East Africa, a real industry hot-spots at the moment.  

Oriel Securities analyst Nick Copeman said: “The acquisition will make Ophir one of the largest holders of exploration acreage in East Africa and will add highly prospective offshore acreage in Tanzania and Kenya to the existing portfolio. 

“In addition Ophir will acquire on-shore acreage in Uganda and the DRC.

Repeating a ‘buy’ recommendation, he added: “Overall this looks like a good transaction that will materially add to Ophir’s exploration position in an area that is attracting substantial industry interest.”

Looking at what the takeover means for Dominion shareholders Westhouse Securities’ Andrew Matharu said: “The deal diversifies Dominion’s shareholders’ exposure to exploration and puts them into a better-funded vehicle.” 

Investors will receive 0.02244 Ophir shares for every Dominion share they currently own, while convertible note holders will receive £21 million (US$32.8 million). 

“The exposure to Ophir's existing discoveries in Tanzania would de-risk the combined portfolio while maintaining significant upside exposure for both companies' shareholders,” Dominion chairman Roger Cagle said in a statement today.  

“The board of Dominion therefore believes that the offer provides greater certainty of value to our shareholders than remaining independent against the background of challenging market conditions, the funding needs faced by Dominion and the inherent risks associated with frontier oil and gas exploration."

Meanwhile Ophir chief executive Nick Cooper stressed that the deal is about building a credible position in the waters off East Africa, which is experiencing an “upsurge of industry attention”.

"Ophir has been at the forefront of exploration efforts in deepwater Tanzania and has developed a detailed technical understanding of this emerging East Africa offshore play,” Cooper said. “The addition of Dominion's assets to our portfolio positions Ophir as the largest independent net deepwater acreage holder in East Africa with a portfolio of seven offshore blocks at high equity levels in highly prospective acreage offshore Tanzania and Kenya.  

“There are significant potential geological, operational and commercial synergies in bringing these portfolios together and we are confident that the combined group will maximise value for shareholders from the exciting position we will command.

“East Africa is experiencing an upsurge in industry attention, partly as a result of Ophir's previous deepwater discoveries, with the involvement of many large oil and gas companies who are scheduled to drill high-impact exploration wells adjacent to the Ophir interests in the near-term.

“Ophir is strongly funded to deliver a sustained drilling programme across its East African portfolio and will seek to accelerate its exploration activities across the region to include the newly acquired blocks."

Investors in Dominion Petroleum (LON:DPL) are set to gain a significant benefit from their position as stakeholders in the exciting East African deepwater play, according to chief executive Andrew Cochran.

This morning in the group’s interim results, for the six months ended June 30, Dominion reflected on what it described as an ‘eventful first half’.

During the period it expanded its East African offshore acreage significantly, adding Kenyan licences to its existing assets in Tanzania. However a plan to raise US$50 million through a placing and earn a stake in prospective Maltese assets was shot down by certain investors at a vote in July.

"Dominion has had an eventful first half of 2011.  Most notably, it has added exciting acreage with the acquisition of Blocks L9 and L15 offshore Kenya,” chief executive Cochrane said.

“We believe that this combined with our existing portfolio, on- and offshore East Africa, will attract industry interest and allow us to retain a sizable portion of upside in these highly prospective blocks.

"The failure of the resolutions at the SGM in connection with Dominion's plans to strengthen its balance sheet and expand its operations was clearly a disappointment for the Board and the majority of Dominion's shareholders who had voted in favour of them. 

"Even with this disappointment, with Blocks L9 and Block L15 now added to its portfolio of exploration assets in offshore East Africa, Dominion holds a leading exploration portfolio in the deepwater East African margin with its three blocks in Tanzania and Kenya.”

The newly added Kenyan PSC's are contiguous to blocks operated by significantly larger operators, Dominion highlighted, and successful drilling has already taken place on these blocks. The company initially plans to carry out seismic exploration across these blocks.

Meanwhile in Tanzania Dominion said it has made significant progress in advancing Deepwater Block 7, with additional mapped prospects estimated between 1.3 and 6.5 trillion cubic feet (P90 to P10).

At the end of the period Dominion had US$10.7 million in cash. To advance these deep water targets through drilling Dominion will have to bring in a major partner, for both technical expertise as well as financial backing.

"Clearly there is work to be done, but the directors anticipate that the expanded, combined portfolio will gain even more industry interest going forward,” Cochrane said.

His research looks at the increasing momentum behind African exploration and singles out six top picks with "buy" recommendations.

They are Tower Resources (LON:TRP), Chariot Oil & Gas (LON:CHAR), Dominion Petroleum (LON:DPL), Cove Energy (LON:COV), Victoria Oil & Gas (LON:VOG) and Bowleven (LON:BLVN).

Although relatively underexplored, Africa, according to statistics, already holds a significant proportion (8.8 percent) of the world’s hydrocarbon reserves.

In the last decade, according to BP data, oil and gas reserves in Africa have increased by 95.9 billion barrels and, of this, 74 percent was oil.

And this increase of proven reserves is expected to accelerate in the next decade, as is the amount of oil and gas exports, said Westhouse.

Focusing on what attracts firms to Africa, the analysts earmarked the positive changes in the political landscape and advances in exploration techniques.

They also highlighted the mix of acreage types and 'company-making' finds from the likes of Tullow Oil (LON:TLW) and Heritage Oil (LON:HOIL), which have raised the continent's profile.

The size of the discoveries mean both majors and state firms are interested in farm-in deals and the improved marketability of gas has increased the interest in gas acreages, added the analysts.

Tower Resources' (Buy, target price: 15.7 pence) main operations are in two of the most exciting "new" exploration regions, Uganda and Namibia, said Westhouse. Short term, exploration drilling is expected in Uganda before the end of the year, and in Namibia in the first half of 2012.

The broker says it believes investors are being overly cautious with regard to Tower and it represents an "outstanding" buying opportunity.

"At current levels around 4.5p, the shares effectively value Uganda and the DeltaM prospect (Namibia), leaving the DeltaP prospect and the Delta leads as free upside."

Chariot Oil & Gas (Buy, target price: 332 pence) is exclusively focused offshore Namibia, where it has interests in four licences on eight blocks.

As well as being one of the largest acreage holders in the region, the distribution of the blocks across several distinctive basins also helps to diversify exploration risk.

"This is an important consideration as the group, and its partners, move closer towards the commencement of drilling operations," said Westhouse analyst Matharu.

The market is also being too cautious on Dominion Petroleum (Buy, target price: 6.4 pence), says Westhouse. Its main interests are offshore Tanzania and Kenya.

The most likely near-term catalysts for the firm are farm-out agreements in Tanzania, and potentially Kenya, followed by Uganda, said the broker. Also keenly awaited is the updated Competent Persons Report for Block 7 in Tanzania because of the expected significant increase in resource estimates.

East African specialist Cove Energy (Buy, target price: 109 pence) has a strategy of taking non-operated stakes in high-potential frontier regions and has so far been very successful offshore Mozambique, where it has participated in four major gas discoveries.

Its near-term catalysts will be driven by its sustained appraisal, exploration and testing programmes over the next two years, said Westhouse analysts.

"Success was achieved relatively quickly with the WBL and Tubarao discoveries, offshore Mozambique, and it appears that the group has the chance to achieve similar success within its portfolio of interests established offshore Kenya."

Victoria Oil & Gas (Buy, target price: 10.8 pence) has its core projects in Cameroon, where the start of gas sales (from Logbaba) at the end of the year represents a key milestone.

"The announcement of additional gas sales agreements to better utilise the field and infrastructure would also be a positive catalyst," said Westhouse.

"Ultimately, gas supply to a large independent power producer, or a third-party LNG facility, is most likely to be required for VOG to capitalise on the full productive potential of Logbaba.

"In the meantime, higher-value contracts with industrial consumers will continue to provide significant value."

Westhouse has initiated coverage on Bowleven (Buy, target price 331 pence), which also operates in Cameroon and also has two permits in Gabon.

"With an active exploration and drilling programme over the next twelve months, further derisking of prospects and delineation of discoveries will provide the catalysts for Bowleven in the near term."

The broker added: "We believe that Bowleven’s active drilling programme during the remainder of 2011 and throughout 2012, has the potential to add significant new resources to current estimates, while also continuing to de-risk existing discoveries."

The London Stock Exchange informed the company at 2pm yesterday that there was an “isolated reference data issue that related specifically to Dominion's shares” and, as result, they would unavailable for trading during the session.

Trade reports in the company's shares that were submitted yesterday were rejected and member firms had to re-submit those same reports again today.

Today, with the shares trading normally, the stock rose 11.6 per cent or 0.55 pence to 5.28 pence in the response to the Malta announcement and further license success in Kenya.

The initial Malta farm-in deal was agreed with Mediterranean Oil & Gas (LON:MOG) in late June but was always dependent on Dominion being successful with a US$50 million fundraiser.

On 25 July, however, at a Special General Meeting, Dominion shareholders voted against the fundraiser. Dominion’s statement today confirms it will not be progressing with the farm-in and that it will now have to pay MOG a US$225,000 termination fee.

The strengthening of its deepwater exploration position in East Africa, meanwhile, is being hailed by Dominion chief executive Andrew Cochran as a major positive. He says the territory in which Block L15 is located is one of the “most sought after addresses in the exploration industry these days”.

He adds: “The region is seeing both growing attention from, and accelerated activity by, major players with Kenya now due for deepwater drilling within the next year following the last year's successes in Tanzania and Mozambique.

"Dominion's new award represents a material expansion of an already enviable deepwater East African portfolio. We can now focus our attentions on the business of exploring these blocks, realizing their true value and embarking on substantive discussions with potential partners to establish plans for drilling."

East Africa has become a major hydrocarbon hotspot of late following a series of major gas discoveries in the region – made by Anadarko (NYSE:APC), Cove Energy (LON:COV), BG (LON:BG.) and Ophir (LON:OPHR).

Dominion's plan is to tie-up a major partner so it can progress a drill programme of its own. Crucially the company believes that its newly expanded acreage could attract even more 'industry interest' and it can now adopt a partnering strategy for these assets.

The company expects to formally sign a production sharing contract (PSC) in Nairobi in the coming weeks. Dominion will be the operator of Block L15 and it will have a 100 per cent stake in the block.

A well was previously drilled on the area covered by Block L15, back in 1985, by Union Oil which encountered good oil shows in the Palaeogene and Upper Cretaceous intervals.

Dominion believes that its assets may be de-risked further in the next twelve months, thanks to nearby exploration drilling.

The new asset, Block L15, lies immediately to the north of Block L8 where a consortium that includes Tullow Oil (LON:TLW) is expected to drill a well on the Mbawa prospect, estimated at 1 billion barrels, next year.

The proposed PSC will have an initial two year exploration period, with a minimum work commitment of US$2.85 million and the acquisition of 250 square kilometres of 3D seismic data.

Beyond this initial two year period Dominion can extend the PSC further by committing to drill a well on the block.

The company believes that the terms and the commitments for L15 compare very favourably to other countries in the region, relative to the block’s potential resource.

Dominion Petroleum (LON:DPL) is building an impressive portfolio in the East African margin, according to Westhouse Securities analyst Andrew Matharu.

Indeed East Africa has become a major hydrocarbon hotspot of late following a series of major gas discoveries in the region – made by Anadarko (NYSE:APC), Cove Energy (LON:COV), BG (LON:BG.) and Ophir (LON:OPHR).

Dominion's plan is to tie-up with a major partner so it can progress a drill programme of its own.

This morning Dominion unveiled a significant expansion in East Africa after it successfully concluded negotiations with the Kenyan government and it was awarded ‘Block L15’ in the Lamu Basin. 

Crucially the company believes that its newly expanded acreage could attract even more 'industry interest' and it can now adopt a partnering strategy for these assets. 

In a note to clients Westhouse analyst Matharu repeated his ‘accumulate’ recommendation with a 6.8 pence target. 

 “With recent exploration success in Tanzania and Mozambique, the next staging post on the high-impact East African drilling horizon is Kenya, which the industry will be hoping is oil prone due to the existence of Cretaceous geology extending into the Lamu basin,” Mathuru said.

Dominion expects to formally sign a production sharing contract (PSC) in Nairobi in the coming weeks, after that it will be the operator of Block L15 and it will have a 100 per cent stake in the block. 

A well was previously drilled on the area covered by Block L15, back in 1985, by Union Oil which encountered good oil shows in the Palaeogene and Upper Cretaceous intervals.

Dominion believes that its assets may be de-risked further in the next twelve months, thanks to nearby exploration drilling. 

The new asset, Block L15, lies immediately to the north of Block L8 where a consortium that includes Tullow Oil (LON:TLW) is expected to drill a well on the Mbawa prospect, estimated at 1 billion barrels, next year.

The proposed PSC will have an initial two year exploration period, with a minimum work commitment of US$2.85 million and the acquisition of 250 square kilometres of 3D seismic data.

Beyond this initial two year period Dominion can extend the PSC further by committing to drill a well on the block.

The company believes that the terms and the commitments for L15 compare very favourably to other countries in the region, relative to the block’s potential resource.

Chief executive Andrew Cochran said: "We are delighted to add Block L15 to Dominion's East Africa deepwater exploration portfolio, one of the most sought after addresses in the exploration industry these days. 

“The region is seeing both growing attention from, and accelerated activity by, major players with Kenya now due for deepwater drilling within the next year following last year's successes in Tanzania and Mozambique.

"Dominion's new award represents a material expansion of an already enviable deepwater East African portfolio. We can now focus our attentions on the business of exploring these blocks, realizing their true value and embarking on substantive discussions with potential partners to establish plans for drilling."

This morning Dominion also confirmed that it will no longer pursue a farm in deal with Mediterranean Oil & Gas. 

The initial farm in deal was agreed in late June but it depended on Dominion raising US$50 million.

However, last week the company’s investors shot down the proposal, as the funding failed to get the required support in a shareholder’s vote.  Dominion will now pay MOG a US$225,000 termination fee.

“The failure of shareholder approval for Dominion’s recent placing means the farm-out of Block-7, offshore Tanzania, on favourable terms is ever more important,” the Westhouse analyst added. 

Investors will have to wait until tomorrow morning to get a reading on the market’s reaction to Dominion’s latest acquisition in East Africa, after a problem at the stock exchange meant that trading was suspended for Dominion’s shares today.

This afternoon the London Stock Exchange said that the problem related to an isolated reference data issue that relates specifically to Dominion’s shares.

“The non-availability of trading is due to circumstances entirely outside the control of Dominion Petroleum Limited. The London Stock Exchange regrets any inconvenience this has caused,” the exchange said in a statement this afternoon.

The shares will resume trading as normal tomorrow.

Dominion Petroleum (LON:DPL) shares jumped over 10 percent in early deals as it expanded its acreage in the East Africa.

This morning it revealed that it has been awarded a new deep-water exploration block offshore Kenya. It told investors that it concluded negotiations with the Kenyan authorities last week. The company will be the operator of Block L9 and it will have a 60 percent stake.

Crucially Dominion said that it may include the new Kenyan block as part of a farm-out process for its Tanzanian asset, Block 7. It said that Block L9 has many geological similarities to Block 7 offshore, and through the farm-out process it will try to coordinate exploration work between the two blocks.

Block L9 is one of the last and best new licensing opportunities along the whole of East Africa’s deepwater margin, Dominion said.

"Kenya's Block L9 represents one of the very few 'ground floor' opportunities remaining in the highly prospective, and increasingly attractive, East African offshore basins,” chief executive Andrew Cochran said.

“The PSC, when signed, will represent a significant expansion of Dominion's deepwater footprint, in an area that is rapidly gaining the attention of major players in the industry.”

There has been growing speculation that the East Africa exploration boom was spreading north into Kenyan waters. The Kenyan government was reportedly in advanced discussions with Dominion and BG, over licences for three exploration oil blocks off the Kenyan coast. 

Previous press reports cited comments from Kenya’s petroleum commissioner, Martin Heya, who claimed that Dominion was interested in one of the three blocks and the government expected exploration licences to be issued by April.

At that time, industry sources confirmed that talks were ongoing, but until now there had been no official word from the company.

It has now agreed the heads of terms with the Kenyan Ministry of Energy, and the award is only subject to the signing of a production sharing contract (PSC), which is expected to take place in Nairobi in April.

Under the agreement the initial exploration period of the production sharing contract will last for two years, in which time Dominion must commit to at least US$6.15 million. After that it can extend the PSC for a further two years by committing to drill one well within that period.

Cochran added: "Through Dominion's expansion to offshore Kenya, with a large operated working interest, we're keeping pace with the industry along the East African margin amongst company's leading the charge in the region. 

“By using the knowledge and experience gained from our operations offshore Tanzania we were able to quickly identify and secure L9 in midst of what was a very competitive process."

Only one well has previously been drilled on the Block, the Simba-1 well in 1979. 

Back then the Simba well encountered gas shows in the tertiary and upper Cretaceous and the well’s results suggested a working hydrocarbon system in the Lamu basin. 

After strong open the shares have settled down somewhat and at 13:30 they were changing hands at 6.57 pence a share, up 3.1 percent.

The Kenyan government is reportedly in advanced discussions with UK-listed firms Dominion Petroleum and BG Group (LON:BG) over licenses for three exploration oil blocks off the Kenyan coast.

Press reports citing comments from Kenya’s petroleum commissioner, Martin Heya, claimed that Dominion is interested in one of the three blocks and the government expects exploration licences to be issued by April.

Industry sources confirmed that talks are ongoing.

It is understood that these three license blocks are contiguous to Anadarko Petroleum’s (NYSE:APC) offshore licences - in which Cove Energy also has a 15.5 stake. 

David Farrell, oil and gas analyst at Evolution Securities, commented on the new frontier in the brokers ‘First Take’ morning note to clients.

“No commercial discoveries have yet been made in the basin, however, a number of oil and gas shows and oil seeps have been observed previously,” Farrell said.

He adds: “The interest shown in the area by Anadarko and BG suggests that if Dominion gains a licence, the company could add value through seismic and interpretation before farming out.” 

Meanwhile, focusing on the assets Dominion already owns, the analyst looked ahead to potential farm-out deals in Tanzania.

“The next significant newsflow from Dominion should be the farm-out of an interest in Block 7 offshore Tanzania which may come later in the first quarter,” Farrell said.

“While farming out to an existing offshore Tanzanian operator (eg Petrobras, BG, Exxon) would be beneficial in terms of speed, we believe superior well carry terms would be achieved by bringing in someone not yet in country.”

Dominion has a significant portfolio of exploration assets in east Africa, with interests in both on and offshore Tanzania, as well as a controlling stake in an exploration license in the Albertine Rift Basin, Uganda. It also has an interest in the Democratic Republic of Congo, where it is partnered with Soco International (LON:SIA) and the DRC’s state oil company to explore ’Block 5’.

Dominion’s assets in east Africa have been turning quite a few heads in the City of late, with Block 7 in Tanzania attracting most of the attention. 

In fact, just this week investment banking giant Goldman Sachs upgraded the stock, as its London-based analyst team eyed-up Dominion's attractive farm-out proposition.

“We view Dominion’s position offshore Tanzania as attractive and believe that farm outs could bring this acreage into focus,” Goldman analyst Christophor Jost said.

Goldman upgraded Dominion to a ‘buy’ and increased its price target from 7.28 to 10.53 pence per share - which implies 54 percent upside from the current price of 6.5 pence.

Werner Riding, oil and gas analyst at Ambrian Capital, also thinks a deal to farm-out Block 7 would be the likely value driver for the stock in the short term.

“In terms of deal timing we are hopeful terms can be agreed with one of the existing regional players before the end of April,” Riding said.

The major regional players include BG Group (LON:BG), Petrobras (NYSE:PBR), Exxon (NYSE:XOM), Statoil (NYSE:STO), Anadarko (NYSE:APC), ENI (NYSE:ENI) and Shell (LON:RDSB).

The analyst reckons Dominion will need US$25 million in back costs and a free carry on at least one exploration well.

According to Riding a successful farm-out could possibly allow drilling to get underway within 12 months t to test the 'Alpha' prospect - a multi-trillion cubic feet gas or 500 million plus barrels of oil target.

The group announced late last Friday it was advised by operator Maurel & Prom that the Kianika-1 well has reached the planned depth of 3,040 metres. The targeted carbonates of the Mid Jurassic Mtumbei formation were found with good reservoir characteristics, however no hydrocarbon shows were encountered.

Under a farm-out agreement with Maurel et Prom, Dominion's funding requirement in respect of the Kianika-1 well on the Mandawa licence was reduced from 100 percent to 20 percent of the drilling costs and to 10 percent of associated expenses.   Dominion retains a 10 percent interest in all profits earned from the Mandawa licence.

In a note issued this morning Ambrian Capital reminded investors that Mandawa is non-core acreage, which was underlined by the farm-out to Maurel & Prom.

The broker assigned a net present value (NPV) of less than 0.0 pence per share, reflecting low gas resources assumed at the well and a low interest in the PSA.

Ambrian said that the disappointment has made it likely that the company will relinquish the remaining stake, allowing it to concentrate on its more highly prospective acreage offshore Tanzania in the East African Margin where 3D seismic is currently being processed over its Block 7 and could "offer significant potential value for shareholders".

"Moreover, we see further upside from its extensive 2D seismic programme at the Lake Edward Basin in the Democratic Republic of Congo/Uganda planned for 1Q11," said Ambrian.

Ambrian retained its ‘buy’ recommendation for the stock as well as its target price of 6.5 pence, compared to the current market value of 6 pence per share.

Last month, Dominion completed a 1,236 square kilometre 3D seismic survey on the Alpha prospect and other prospects in deep-water Tanzania.

It also highlighted a recently completed competent person’s report (CPR) that put the Alpha prospect’s mean prospective resource at 1.1 billion barrels of oil, or 7 trillion cubic feet in the gas case.

Last month, BG Group (LON:BG) and Orphir Energy struck oil in the Pweza-1 well. It was the first discovery of its kind in Tanzania. Crucially it proved the existence of a working hydrocarbon system in deep-water Tanzania.
Elsewhere Dominion is readying further seismic operations, in the Lake Edward basin which straddles Uganda and Democratic Republic of Congo.

It will start work on the first ever cross-border 2D seismic survey in the first quarter of 2011. Dominion plans to acquire over 300 kilometres of seismic data.

It is expected to last between 3 to 4 months.

The survey follows on from the Ngaji-1 well which was drilled in the Ugandan area of the project. The well did not identify any significant hydrocarbons, but it did provide more information about the prospective area.
Dominion said that Ngaji-1 well confirmed the presence of excellent quality reservoir sands as well as hints of source potential.

It also highlighted a recently completed competent person’s report (CPR) that put the Alpha prospect’s mean prospective resource at 1.1 billion barrels of oil, or 7 Trillion cubic feet in the gas case.

Investors liked the news, and shares in the company were trading up nearly 8% in early deals at 3.75 pence.

“We are extremely excited by what we already know about Block 7 and early results from the 3D support the drilling of Block 7, perhaps next year depending on rig availability," chief executive Andrew Cochran said.

The survey was carried out by Fugro Geoteam AS. It covered both the Alpha and Beta prospects, as well as three others.

The analysis of the seismic results will help to re-assess volumes and improve chances of success for the Alpha prospect, as well as the other prospects mapped in the survey area.

The data is being processing and ‘fast-track’ processed volume will be ready later this week,  while full results will be complete by Q2 2011.

It will support amplitude variations with offset (AVO) studies. The company highlighted that such studies, based on 2D data, has already helped de-risk Alpha and Beta. 

Importantly Dominion also highlighted a recent nearby discovery which it believes confirms the prospectivity of deep-water Tanzania.

Last month, BG Group (LON:BG) and Orphir Energy struck oil in the Pweza-1 well. It was the first discovery of its kind in Tanzania. Crucially it proved the existence of a working hydrocarbon system in deep-water Tanzania.

"The recent discovery in Tanzania is very significant and justifies the increased levels of interest shown by major industry players in deepwater East Africa,” Cochran added.

Meanwhile onshore Tanzania, the Kianika-1 well is being drilled on the Mandawa PSA and it is expected to reach the 2,900 metre planned depth before the end of November. 

The company has a 10 percent interest in the Mandawa PSA.

Elsewhere Dominion is readying further seismic operations, in the Lake Edward basin which straddles Uganda and Democratic Republic of Congo.

It will start work on the first ever cross-border 2D seismic survey in the first quarter of 2011. Dominion plans to acquire over 300 kilometres of seismic data. 

Dominion expects to hire contractors by year’s end, allowing the survey to start in January.

It is expected to last for between 3 to 4 months.

"Obtaining the first ever cross-border seismic on the Lake Edward basin demonstrates Dominion's unique and strategic position in the play,” Cochran said. 

The survey follows on from the Ngaji-1 well which was drilled in the Ugandan area of the project. The well did not identify any significant hydrocarbons, but it did provide more information about the prospective area.

Dominion said that Ngaji-1 well confirmed the presence of excellent quality reservoir sands as well as hints of source potential. 

“While Ngaji-1 disappointed on some levels the subsequent analyses easily justify continued exploration of the basin, now armed with a better understanding of the basin as a whole,” Cochran added.

“We could return to drilling as early as next year depending on the outcome of the new seismic."

Dominion has previously stated that the Ngaji prospect has an unrisked resource of 100 mmbbls (million barrels) of oil. 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.

Earlier this year, in March, Dominion raised £32.7m through an institutional placing, to fund exploration in Uganda and Tanzania.

In Tanzania, the company and its partner Les Establissment Maurel et Prom (M&P), spudded the PSA Kianika-1 well in June. The well is targeting recoverable resources of 77 mmboe (million barrels of oil equivalent) in a structural closure.

Also, a 1,000km2 3D seismic acquisition programme is slated to get underway in July, on Dominion’s wholly owned Offshore Deep Water Block 7. Back in June, a CPR (competent persons report) by Energy Resource Consultants stated that the ‘Alpha’ prospect, on Block 7, has a mean prospective resource of 1.104Bbbl (billion barrels) of oil or 7.069Tcf (trillion cubic feet) of gas.

The Alpha prospect is only the first in the block and the CPR work undertaken on Alpha was intended to assist in planning a 1,000 sq km (square kilometre) 3D seismic survey, set to begin next month. This will be followed by further work on the other prospects and leads already identified in the 2D seismic. Energy Resource Consultants (ERC), which prepared the CPR, risked the Alpha prospect with a 12% chance of success. The net risked mean resource was estimated at 134 MMbo (million barrels of oil) or 848 Bcf.

Alpha is in water depths of 4,000 ft (feet) and represents multiple drilling objectives all the way down to 16,000 ft.
“This is an excellent start and it demonstrates the 'world class' nature of Block 7 in terms of  hydrocarbon potential. The Alpha prospect is not unique, nor even the largest so far identified, within Block 7 but simply the most robust prospect to guide our continued work in the area. Once armed with the upcoming 3D we will carry out additional technical analyses and update the full prospect and lead inventory accordingly,” said chief executive of Dominion Petroleum Andrew Cochran.

The company has also reported the spudding of the Kianika-1 well in its Mandawa PSA, also in Tanzania, targeting a 264 Bcf gas prospect at a depth of 9,000 ft with a 9% chance of success. Dominion has retained a 10% interest in the project after farming out the remaining 90% to Les Establissment Maurel et Prom (M&P) as part of its efforts to focus on “higher-impact projects elsewhere in the portfolio.”

In the Democratic Republic of Congo, the company and its partner, FTSE 250 oil and gas producer Soco International (LON:SIA), have been informed that the government has ratified the Production Sharing Contract (PSC) for Block 5 in the Albertine Graben area, which was the final step in the award of the block.

The block, which is adjacent to Dominion’s Exploration Area 4B (EA4B) in Uganda, is located in the Albertine Rift system and includes the DRC’s portion of the prolific Lake Edward Basin. The partners may seek to acquire 2D seismic this year in conjunction with similar activities planned by Dominion in EA4B later in 2010. Dominion holds a 46.75% stake in the project.

During the initial five year exploration period, Soco and Dominion have committed to acquire at least 300 km of seismic data and drill two exploration wells.

Earlier this month, Dominion spudded the Ngaji-1 well on Block EA4B at a location that the company said was best to test the geology of the Lake Edward Basin with the aim of identifying elements of a working petroleum system.
Data from this well, which is expected to be completed in July, will guide the company’s future operation in the area. Dominion has said that it has so far made “significant progress” in drilling the well.

Dominion has also initiated an environmental and social impact assessment for a follow-up seismic programme for subsequent appraisal work on the acreage later in the year, followed by more drilling in 2011. The company added that all of its operational plans announced in March have so far met its expectations in terms of safety, schedule and cost.

The Ngaji prospect has an unrisked resource of 100 mmbbls (million barrels) of oil. 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.

The company has been able to attract new funding through placings that brought in US$10 million in August 2009 and another US$50 million in March 2010, giving it the means to finance its active 2010 drilling campaign.

“Dominion has a commanding position throughout the Lake Edward and a substantial exploratory program underway in the basin already, so we will no doubt hit the ground running,” said Cochran.

Shares in the company rallied 8.5% on today's news.

In London on Wednesday 2nd June at the Chesterfield Mayfair Hotel, you will see the management of Xtract Energy (AIM:XTR), Nighthawk Energy (AIM: HAWK), Lydian International (TSX: LYD) and Gulfsands Petroleum (AIM: GPX).

In Manchester on Thursday 3rd June at the  Lowry Hotel, the directors of Xtract Energy (AIM: XTR), Nighthawk Energy (AIM:HAWK), Po Valley Energy (ASX: PVE) and Dominion Petroleum (AIM: DPL) will be presenting. 

You can find further details on the presenting companies below. Please arrive at each event by 5:45pm for the presentations to begin at 6:00pm. Each company will have twenty minutes to present and then ten minutes for Q&A.

Following the presentations will be a complimentary bar and an assortment of the finest hot & cold canapes, giving our guests the opportunity to liaise and network with the directors and other attendees.

Both forums are free to attend, and it is expected that they will be oversubscribed, so please register to avoid disappointment. We hope you can make it and look forward to seeing you.

Please register your attendance here.

Other selected oil and gas companies listed in London

Afren (LON:AFR)       
Alkane Energy  (LON:ALK)             
Aminex  (LON:AEX)       
Antrim Energy (LON:AEY)       
Ascent Resources (LON:AST)       
Aurelian Oil & Gas (LON:AUL)       
Bankers Petroleum  (TSE:BNK)             
Borders & Southern Petroleum (LON:BOR)       
BowLeven (LON:BLVN)                         
Cairn Energy (LON:CNE)       
Caspian Holdings  (LON:CSH)         
Chariot Oil & Gas (LON:CHAR)       
Circle Oil (LON:COP)       
Dana Petroleum (LON:DNX)       
Desire Petroleum (LON:DES)       
Dominion Petroleum (LON:DPL)       
Dragon Oil (LON:DGO)       
Energy XXI  (LON:EXXS)      
Europa Oil & Gas (LON:EOG)       
Falkland Oil & Gas (LON:FOGL)       
Faroe Petroleum  (LON:FPM)       
Fortune Oil (LON:FTO)       
Forum Energy (LON:FEP)              
Geopark  (LON:GPK)       
Global Petroleum (LON:GBP)       
Great Eastern Energy (LON:GEEC)       
GTL Resources (LON:GTL)       
Gulf Keystone Petroleum (LON:GKP)       
Gulfsands Petroleum (LON:GPX)            
Hardy Oil & Gas (LON:HDY)       
Heritage Oil (LON:HOIL)              
Independent Resources (LON:IRG)       
Indus Gas  (LON:INDI)       
Island Oil & Gas  (LON:IOG)       
Ithaca Energy  (LON:IEA)       
JKX Oil & Gas  (LON:JKX)       
Lansdowne Oil & Gas (LON:LOGP)      
Leed Petroleum (LON:LDP)       
Leni Gas & Oil (LON:LGO)       
Maple Energy  (LON:MPLE)       
Max Petroleum  (LON:MXP)      
Mediteranean Oil & Gas  (LON:MOG)       
Melrose Resources (LON:MRS)      
Nautical Petroleum (LON:NPE)       
Nighthawk Energy (LON:HAWK)       
Northern Petroleum (LON:NOP)       
Nostra Terra Oil & Gas (LON:NTOG)       
Oilex (LON:OEX)       
Pan Andean Resources (LON:PRE)       
Pantheon Resources  (LON:PANR)       
Petrel Reources  (LON:PET)       
Petro Matad  (LON:MATD)       
Petroceltic International (LON:PCI)       
PetroLatina Energy  (LON:PELE)             
President Petroleum  (LON:PPC)       
Providence Resources  (LON:PVR)       
Range Resources (LON:RRL)       
Regal Petroleum  (LON:RPT)       
Resaca Exploitation  (LON:RSOX)       
Rockhopper Exploration  (LON:RKH)              
Roxi Petroleum  (LON:RXP)          
Salamander Energy (LON:SMDR)       
San Leon Energy (LON:SLE)             
Sefton Resources (LON:SER)       
Serica Energy (LON:SQZ)       
Sound Oil  (LON:SOU)      
Spitfire Oil  (LON:SRO)      
Sterling Energy (LON:SEY)       
Stratic Energy  (LON:SE)       
Tower Resources  (LON:TRP)       
Tullow Oil  (LON:TLW)         
Valiant Petroleum (LON:VPP)       
Victoria Oil & Gas  (LON:VOG)       
Volga Gas (LON:VGAS)             
Woburn Energy  (LON:WBN)       
Xcite Energy  (LON:XEL)       
Xtract Energy  (LON:XTR)

M&P will gain an additional 40% interest in Mandawa PSA to take its total stake in the project to 90%, as well as a 35% interest in Kisangire, reducing Dominion’s interest in both PSAs to 10%. FTSE 250 oil and gas producer Heritage Oil (LSE: HOIL) operates and owns the remaining 55% interest in Kisangire.

In return for the additional interests, Dominion will see its funding requirements reduced from 100% to 20% of the drilling costs and to 10% of all associated expenses in respect of the Kianika-1 well on the Mandawa license. M&P’s interest in Mandawa could rise to 100% if the government of Tanzania agrees that exploration expenses incurred on other licenses can be carried over to the Mandawa license, at which point all of Dominion’s costs relating to the Kianika-1 well will be reimbursed.

“This agreement with Maurel & Prom constitutes active portfolio management and is part of the corporate repositioning recently undertaken. It significantly reduces Dominion's financial commitments for 2010 and allows us to focus more attention on our higher impact exploration assets in Uganda and Offshore Tanzania. We plan to increase activity in these two core areas during the course of this year,” said Chief Executive of Dominion Petroleum Andrew Cochran.

Gupta has also worked for Charterhouse Petroleum and Petrofina, and has 25 years of experience in the international upstream oil and gas business under his belt.

The company is currently going through a transitional period, embarking on a period of intense operational activities, having planned to drill five exploration wells, complete seismic surveys in Democratic Republic of Congo Block 5 where it has a 100 percent working interest, add exploration acreage in and around East and Central Africa and seek farm-in and farm-out arrangements, the acquisition of production or appraisal assets and asset swaps to manage exploration risk.

Dominion is also set to undertake a drilling programme in Uganda, where it has identified 4 prospects and 11 leads in Block EA4B, set to start early next year.

“I am very pleased to have Atul join us as his experience in projects such as the development of the M'Boundi field in the Republic of Congo, as well as in building a successful independent oil and gas company, will be of considerable value to Dominion at such a pivotal time. I am sure that the whole of the new Dominion team will appreciate his knowledge, support and advice going forward,” said Chief Executive Officer of Dominion Andrew Cochran, who was appointed last month.