Xcite Energy saw its shares jump yesterday after saying it had found more oil than expected on the Bentley field south-east of Shetland.
Shares in the firm, which has its operational headquarters at Banchory, lifted nearly 23% to 174.5p after the announcement.
This is the latest in a string of recent good news stories for the future of the UK North Sea.
Xcite did not change its previous base recovery estimate of 160million barrels for Bentley but sources told the Press and Journal it was only a matter of time before the figure was revised upwards.
Xcite said a pilot section of a well on Bentley had confirmed a 113-foot column of oil: 40ft thicker than earlier anticipated.
Arbuthnot Securities, Xcite’s broker, said the increase backed up management expectations of “significant upside potential” in the east of the reservoir.
Xcite has already started work on a horizontal sidetrack, which chief executive Richard Smith said should be completed – weather permitting – by the end of next month.
The firm will not raise its estimate of the potential size of the field until there is more certainty, but Mr Smith said the thicker oil column would add reserves.
Xcite’s announcement follows hot on the heels of a slew of positive news stories from the UK North Sea.
The Cladhan discovery, 225 miles north-east of Aberdeen, produced drilling results well above expectations and two other sizeable oil finds – Catcher and Blakeney – in recent months have helped to buck a trend of declining discoveries.
Alternative Investment Market-listed Xcite is focused on heavy oil, which is more difficult to produce because of its thick, sticky consistency. Its Bentley asset is in Block 9/3b, about 100 miles east of Shetland.
Xcite Energy Resources, a wholly owned subsidiary of the group, was awarded a 100% working interest in the block in 2003 as part of the 21st UK offshore licensing round.
Earlier this year, Xcite said it had secured a farm-in partner, US-owned exploration and production company Challenger Minerals (North Sea), which agreed to provide about £2.8million towards well costs in return for a 4% stake in the field.