Hurricane Exploration said yesterday it had discovered light oil at its Lancaster prospect west of Shetland.
It added that, although the find was potentially very significant, data gathered required further analysis before estimates of potential reserves and productivity could be determined.
The Hampshire-based company said Lancaster was a basement reservoir, which can be found in rocks originally situated below the usual oil and gas-bearing areas.
Hurricane said: “This is the first time a basement reservoir has been planned and drilled as an exploration target on the UK continental shelf (UKCS) and it demonstrates the validity of Hurricane’s geological model.
“It is also believed to be the first confirmation of significant volumes of light oil in the west of Shetland.”
Hurricane has a 100% interest in the licence block.
The company said that, unfortunately, efforts to carry out a comprehensive production test had been curtailed because of malfunctioning test equipment and inclement weather.
Hurricane said it was in the process of making a thorough evaluation of data gathered during the drilling, logging and incomplete testing operations of the well.
It added: “The preliminary results are extremely encouraging and Hurricane intends to return to the Lancaster prospect in 2010 either to re-enter the Lancaster well to undertake an extended well test or drill an appraisal well.
Hurricane chief executive and exploration director Robert Trice said: “We are delighted that the Lancaster discovery has validated our geological model regarding this prospect.
“The existence of light oil in the Lancaster reservoir not only significantly derisks our other basement prospects but is also extremely positive news for west of Shetland exploration.
“We have clearly taken huge strides forward with this well, but further testing and/or drilling operations will be required before we can confirm the discovery’s true commercial potential.”
Hurricane is privately funded and was founded in 2005 by Mr Trice and James Hudleston.
It is the operator of two offshore and two onshore licences in the UK, but intends to acquire exploration acreage abroad.