Antrim Energy (LON:AEY) shares soared 140% after it estimated that the Skellig block, offshore Ireland, could contain as much as 4.5bn barrels of oil equivalent.
Antrim retains a 25% stake in the asset following its tie-up with the current operator Kosmos Energy.
Consultant McDaniel & Associates has assessed the block, which currently has 17 identified leads, and puts potential resources between 260mln (low estimate) and 4.5bn (high estimate) barrels – with a ‘best’ estimate of 1.1bn barrels.
The two largest leads were given a combined ‘best’ estimate of 482mln barrels.
Antrim also told investors that findings from a recently completed 3D seismic programme strongly indicate the presence of Lower Cretaceous slope fan and channel deposits akin to many of the recent Cretaceous oil discoveries offshore West Africa.
Having jumped over 150% in early deals Antrim’s AIM shares are at their highest since October.
Taken in the context of Antrim’s recent restructuring, the resource estimates are a reminder for investors that value and ‘upside’ remains within the group’s portfolio.
Antrim shelled off producing North Sea assets last year after delays, cost over-runs and oil swap derivatives diminished their profitability.
The deal with Kosmos, agreed last April, now provides an opportunity for Antrim to reinvent its investment proposition.
Despite the picture Providence’s price paints, it has fallen 80% since last July’s well as speculators dumped stock, the Dunquin well has provided a number of positives for explorers in the region.
Dunquin failed to find hydrocarbons in commercial volumes, but did encounter indications that oil was present in the basin.
The intervening period has been relatively quiet in terms of exploration, with Kosmos’s 3D seismic programme over the three blocks being the only notable activity.
But, it is anticipated that Kosmos, which also farmed into two blocks licensed to Europa Oil & Gas (LON:EOG), will finalise and announce its offshore drilling plans soon – which may set out a new timetable of catalysts for the region.
As part of its deal with Kosmos, Europa secured contingent drilling commitments – potentially worth US$200mln – in exchange for 85% of the licences, while Antrim retained a slightly larger stake in Skellig without pre-arranging drilling options with the big-cap explorer.
In light of the apparently huge size of the potential prize, news from Kosmos of future drilling is likely to be very closely followed.