Reabold Resources expanded the value of the UK’s biggest onshore hydrocarbon field this morning when it announced that it had found oil in what was previously thought to be a gas-only field.
The Humberside-based field, which was announced in June as the largest onshore gas discovery since 1973, is around 70 per cent oil, and 30 per cent gas.
The field is a 65-metre column of hydrocarbons, 45 of which are oil, according to the latest measurements.
The news sent investors scrambling for Reabold’s stock, which rose 12 per cent to 1.4p today. The shares hit highs of 1.70p earlier.
“It’s never completely out of the blue, there were indications of this reservoir possibly containing oil … but we were taking a cautious view,” co-chief executive Sachin Oza told City A.M.
“So it’s not a complete surprise, but we are very, very, very pleasantly surprised.”
The discovery of oil means that the company will expect to be able to make more money from the field. Previous estimates had shown that the site was worth around £247m.
“The realisation that we appear to have a 45 metre oil column is a significant and exciting development in the evaluation of this cornerstone asset,” said Stephen Williams, Oza’s fellow co-chief executive.