Shares in Premier Oil shot up more than 30 per cent this morning after the firm announced a "world class" oil discovery offshore Mexico.
Together with joint venture partners Talos Energy and Sierra Oil & Gas, Premier said its Zama-1 well has more than one billion barrels of oil in place, according to initial gross estimates. The well could also extend into a neighbouring block.
Premier's shares jumped 34.05 per cent to 62p at the market open.
Tony Durrant, chief executive, said: “We are delighted to be announcing this significant new oil discovery offshore Mexico. We have encountered a very substantial oil bearing interval which indicates over 1bn barrels of oil in place, a commercial standalone development which adds materially to Premier’s portfolio of assets worldwide.
"It is particularly pleasing that our strategy of focusing our exploration portfolio on high impact opportunities in proven but under-drilled basins has led to this world class discovery with our first well in Mexico," Durrant added.
Premier Oil holds a 25 per cent interest in the block, Talos holds 35 per cent and Sierra holds 40 per cent.
The well hit a gross oil bearing interval of over 335 metres, with up to 200 metres of net oil bearing reservoir. Initial tests of hydrocarbon samples recovered to the surface contain light oil.
The joint venture is currently setting a liner to protect discovered reservoirs before drilling deeper.