FAROE Petroleum, of Aberdeen, saw its shares jump more than 15% yesterday after it announced a drilling success west of Shetland.
The firm said the 206/5a-3 exploration well had discovered oil in the Fulla prospect.
There was a gross oil column of 133 feet and a net oil column of 45ft.
It was Faroe’s first operated exploration well and it said reservoir quality was better than expected. Faroe has a 50% interest in this licence and its partner is Canadian Overseas Petroleum.
Graham Stewart, chief executive of Faroe, said: “We are very pleased with the positive outcome of this frontier west-of-Shetland exploration well.
“To announce a discovery in our first operated well is a significant achievement for Faroe Petroleum and is a realisation of the team’s vision and ability. Further work will be conducted in the coming weeks to gain a deeper understanding of the structure and its contents.
“With better-than-expected reservoir quality and good indications of mobile oil, we believe there is potential for a commercial field development, most likely in combination with our nearby Freya discovery.”
Faroe won the licence, which includes Freya, in the 22nd UK round in 2005.
There has been speculation that Fulla and Freya could contain 100million barrels of recoverable reserves.
Possible development of the fields could include subsea tiebacks to other infrastructure in the area.
Mr Stewart added: “We look forward to three further exploration wells to be drilled in Norway this year.
“The Butch well with Centrica as operator is currently drilling, and we have two further wells, T-Rex and Kalvklumpen, planned to commence in the coming months.”
The Awilco-owned WilPhoenix semisubmersible rig, which was used for the Fulla drilling operation, is now to plug and abandon the well as planned.
The well was drilled to 7,711ft in 407ft of water.
The find is to the north-east of the BP-operated Clair field.
Faroe’s portfolio takes in more than 40 licences west of Shetland, offshore the Faroe Islands, the UK North Sea and Norway.
It also has interests in six producing oil and gas fields in the UK and Norway.