Faroe Petroleum Plc (LON:FPM) shares gained more than 8% on Thursday after unveiling a new oil and gas discovery in the Norwegian part of the North Sea.
The Brasse well was drilled to a depth of 2,780 metres and encountered 18 metres of gas bearing and 21 metres of oil bearing reservoirs.
The company described the discovered oil and gas as ‘high quality’, and noted that the oil reservoir is believed to be analogous to the producing Brage producing field which is 13 kilometres away to the north.
A side track well will now be drilled to confirm reservoir distribution and hydrocarbon contacts.
Faroe Petroleum owns a 50% stake in the new discovery, and has 14.3% of Brage.
"We are very pleased to announce the oil and gas discovery at the Brasse prospect and await the results of the sidetrack,” said Graham Stewart, Faroe Petroleum chief executive.
“This discovery in one of our core areas, builds on Faroe's already significant position in the Norwegian North Sea via a low cost exploration well.
“If the Brasse drilling results prove a commercial discovery, it could be tied-back to the Brage production facilities or alternatively to other nearby installations. Once there is further information in relation to results from the sidetrack well we will update the market."
At 11:30, Faroe Petroleum shares were up 4.25p, 6.9%, trading at 65.75p.
Repeating a ‘buy’ recommendation and a 100p price target, Cantor Fitzgerald analyst Sam Wahab in a note said: “This is potentially significant news for Faroe with the discovery close to existing infrastructure.”