Shares gush for oil firms after big find

PREMIER Oil, EnCore Oil and Nautical Petroleum saw their shares rocket yesterday after a North Sea oil find which has the potential to be one of the area’s biggest in a decade.

The discovery at Catcher East, 110 miles east of Aberdeen, means the field is estimated to hold up to 300m barrels of oil, making it the biggest find since the billion barrel Buzzard reservoir off Aberdeen in 2001.

Now EnCore plans to drill a further well to discover if it stretches further.

Premier, which owns a 35 per cent share in the licence, immediately upgraded its reserves estimate for the block to between 50-80m barrels – up on the 25-50m estimate it gave earlier in June. Its shares rose 6.6 per cent to close at £12.60.

It said in a statement that data indicates Catcher East and the earlier Catcher discovery are likely to be “part of a single oil accumulation”.

Meanwhile smaller British explorers EnCore and Nautical, which both own 15 per cent stakes in the licence, saw their shares shoot up by 48.6 per cent and 22.5 per cent respectively. EnCore’s stock closed at 52.75p while Nautical rose to 170p.

A further 20 per cent of the licence is privately owned by explorer Wintershall and a company backed by Lord Rothschild, Agora Oil & Gas, holds the remaining 15 per cent.

EnCore chief executive Alan Booth said the find was exceptional, adding “Initial analysis suggests a series of discoveries that would form one of the larger North Sea oil accumulations of recent years.”

Oil would likely start to be produced at Catcher from 2013 or 2014 using a floating production storage and offloading unit, said Premier’s chief financial officer Tony Durrant.

He said that if the estimate of 300m barrels of oil in place at Catcher is accurate, and if around 50 per cent of that oil were recoverable, Catcher would be one of Premier’s largest oil fields and would boost the company’s total reserves by 15 to 20 per cent.

“Regardless of further upside, the discoveries are clearly commercial and we would expect that development studies will begin soon to bring the fields rapidly into production,” said Oriel Securities analyst Richard Rose.