Tullow Oil has said it has found oil in the Acajou prospect in the Ivory Coast, confirming the hydrocarbon potential of the area.

The well on licence CI-26 was drilled around 24 km off the coast of the Ivory coast in water depth of 3,050 ft.

It reached a total depth of 8,027 ft and encountered a gross oil column of over 250 ft. Tullow said the oil was of good quality, similar to that found in the nearby Espoir field.

Tullow has a 24 per cent interest in the Acajou discovery with Canadian Natural Resources and Petroci holding 66 per cent and 10 per cent respectively.

"We are pleased with the success of this exploration well as it underlines the potential of the Acajou area," Mr Brian O'Cathain, the managing director of Tullow Oil International, said.

He said the test rate was encouraging for the economic development of the discovery while the well also encountered a significant sand section below the oil water contact, which holds potential in the northern part of the structure.

Elsewhere on the licence, Tullow said the build-up of production in the Espoir field was progressing according to plan.

Tullow said it was confident of meeting its target of 25,000 barrels of oil per day gross oil production by the end of the second quarter of 2003.

Davy Stockbrokers noted that confidence in the cash and earnings projections for Tullow this year should be significantly enhanced by this news.

"The Espoir field and CI-26 licence constitute a key value creation area for Tullow and we look forward to further active exploration, appraisal and development in this exciting region," Mr O'Cathain said.

Tullow shares gained 2.8 per cent in London yesterday to 73.5 pence sterling while in Dublin, they were up three cents or 2.9 per cent to €1.05.