Investor in Falkland oil drillers have their fingers crossed that the encouraging initial signs from the Isobel Deep project will prove to be another new discovery.
Deutsche Bank this week said the oil shows at Isobel Deep are an inconclusive but positive indication.
Premier Oil (LON:PMO), Rockhopper (LON:RKH) and Falkland Oil & Gas (LON:FOGL) this week revealed that the well results would be delayed between ten and fifteen days after the oil shows were encountered above the main target reservoir.
It comes after the first well in the current campaign, Zebedee, made a discovery.
At this stage it is still far too early to say Isobel is another new oil discovery - if confirmed it would be the third in the basin - and much more exploration is required.
Success here would, however, be very significant for the future development of the North Falkland basin.
Lucas Herrmann, an analyst at Deutsche, says Isobel is arguably the highest potential prospect of the four Falkland wells that Premier Oil is involved in.
“In our view, oil shows are inconclusive at this stage but a positive indication that suggests source extends this far south in the basin,” the analyst said in a note.
“The well is testing the southern extent of the basin and success could establish a second, discrete hub, potentially equivalent in size to Sea Lion to the north.”
He also highlights that Isobel has the potential to enhance the appeal of the Falklands to potential new partners should Premier seek a farm-out to support its field development plans.
Further discoveries would also be a boost to the economics of other projects in the basin and would provide additional ‘optionality’ if there were any disposal talks in the future.