The Background
East Africa is becoming something of a magnet for oil companies seeking exciting oil exploration prospects.  It’s become an extremely hot area ever since Tullow and Heritage Oil’s big successes along the Albertine Rift in Uganda which is shaping up to be East Africa’s largest resource.  An astonishing 27 of 28 wells drilled in the region have struck oil, and Heritage have illustrated the scale of the prize on offer by announcing a deal to sell their interests to ENI for approximately $1.5bn.

Sub Saharan East and Central Africa are extremely under-explored with only a 9% proportion of total wells across Africa being drilled in the regions [1] .  South of Sudan there are only 2 producing complexes - one in Tanzania and one in central Mozambique, which is something of a statistical anomaly.  Tullow’s world class Lake Albert resource that’s in development is adding Uganda to the list.

Dominion was one of the first companies to enter Uganda, and snapped up the Block 4B licences 400km to Tullow’s south in 2007.  Sharing geological similarities to Tullow’s Lake Albert resource, and being part of the same Albertine Rift,  Dominion’s prospects around Lake Edward are potentially very significant with talk of billion barrel potential.  Dominion is the second largest acreage holder after Tullow in the Albertine Rift holding 1.06 million acres.

Dominion is aiming to drill it’s first well in Block 4B in the first half of 2010 in a year that’s lining up to be the most active in the company’s history. Dominion will participate in between 2 and 5 drills across Uganda and Tanzania over the next 12 months.

The History
It’s been a checkered couple of years for Dominion with a dry well plugged in Tanzania, a legal wrangle with their former finance director settled for $2.5m and a period spent skating on financial thin ice before the company received $10m in new funding from a hedge fund that should see them through to the farm out negotiations for Block 4B.

The funding came from BlueGold Global Fund LLP [2] , run by the ex-Vitol traders Dennis Crema and Pierre Andurand.  BlueGold has been one of the best performing hedge funds in London over the last couple of years rising by a staggering 210% in 2008 in a year when other hedge funds were…

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