Hurricane Energy Plc (LON:HUR) shares jumped around 40% in Friday’s early deals after it revealed better than expected results for its first new well at the Lancaster field in the North Sea.
The well measured a 620 metre oil column, extending deeper than a previous third party assessment had anticipated.
It means that the company now believes that Lancaster hosts significantly more contingent resources than the previous estimate of 200mln barrels.
Not only is there more oil, testing has shown significant volumes of flowing oil.
The well measured natural flow rates of 6,600 barrels of oil per day, and with artificial lift with an electrical submersible pump that increased to 11,000 bopd. The oil was found to be good quality, 38 API, and no formation water was produced.
On AIM, Hurricane shares rose around 40% to trade as high as 35p, some 130% above the level of April’s premium priced £52mln share placing.
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Dr Robert Trice, Hurricane chief executive, said: “I am delighted that the Pilot Well has confirmed a significant oil column deeper than the 2C Case set out in the company's CPR.
“Our initial assessment of the well results, which are subject to refinement of the provisional data, suggest that the Lancaster field is likely to be significantly greater than the 200mm bbls 2C case.
“The combination of high flow rates, an extensive oil column and underlying aquifer materially de-risks Hurricane's plans for a future Lancaster field development and further underlines the potential of the fractured basement West of Shetland."
This was a data gathering pilot well and the reservoir section will now be closed off before a new horizontal well is kicked out higher up the hole and drilled out.
Hurricane Energy intends the horizontal well to be part of the initial Lancaster field development as a future production well. Both wells are expected to provide valuable information for the filed development planning phase.