Shares in
Afren (AFR) were up more than 5% as it announced the discovery of "significant" amounts of light oil in its offshore Nigeria Ogo-1 well.
The well, located on the OPL 310 licence, has been drilled to a depth of 10,518 feet, encountering 216 feet of net stacked hydrocarbon pay in a 524-foot section.
The resources explorer was targeting 78 million barrels of oil equivalent (mmboe) from the well, but announced on Wednesday that "targeted resources are likely to be significantly in excess of previous estimates".
"The discovery of oil in the Ogo-1 well opens up a new oil basin in an under-explored region and represents a possible extension of the West African Transform Margin," commented chief executive Osman Shahenshah.
"We look forward to working with our partners to realise the full potential of Ogo and our additional prospects on the licence."
Afren holds a 40% economic interest in the licence. The other partners include Optimum, with a 30% interest, and Lekoil (LEK), which holds the remaining 30%.
The partners plan to drill the Ogo-1 well to a total depth of 11,800 feet before beginning work on a side-track which will target 124 mmboe of gross P50 prospective resources.
Investor view
"If this news does not move Afren into a new trading range I will be very concerned," said Interactive Investor discussion board user 'dannysuko'.
"This news is very significant and will definitely add to Afren's economic valuation. The market has to acknowledge Afren as a successful mid tier [explorer and producer] at some stage and the [share price] will then reflect accordingly."
'Foxx1970' agreed the results were good news for Afren, adding: "The 100,000 [barrels of oil per day] by 2017 target does not look so far away now."