UPDATE 1-Horn Petroleum finds oil in Somalia well

May 17 (Reuters) - Horn Petroleum Corp confirmed the presence of oil at its Shabeel well in the Dharoor Valley basin of Somalia's Puntland.

"We are highly encouraged with these early results which indicate oil bearing sands in possibly two zones," CEO David Grellman said in a statement.

Horn Petroleum operates the Shabeel well. It holds a 60 percent working interest in the Dharoor and Nugaal blocks in the Puntland region in Somalia.

Puntland is a semi-autonomous region in the northeast part of Somalia. Booming oil exploration in waters off East Africa has led to speculation about the potential for finding oil offshore Somalia in the Horn of Africa.

Horn said the well encountered additional potential net pay sands -- which indicate the presence of oil or gas in commercial quantity -- in the Jurassic Adigrat formation.

Shares of the company, which has a market value of about C$123 million, closed at C$1.62 on Wednesday on the Toronto Venture Exchange.