Shares in Cluff Natural Resources rocketed in early trading today after the firm said one of its southern North Sea gas licences could be worth almost £700million.
London-listed Cluff said it had commissioned Xodus Group to review development scenarios and gauge the economic viability of two of the six prospects on P2248.
Xodus’s scoping study found that the economics were “robust” for a range of development options on the Cadence-Scremerston Prospect and the Bassett Bunter Sandstone.
Cluff said Cadence’s estimated value following a gas discovery would be about £87million, compared to £69million for Basset.
The firm said the “implied extrapolated un-risked” net present value for all six prospects was £697million.
Cluff’s shares were up 12.26% to 2.98p at 8:25am.
Algy Cluff, the company’s chief executive and chairman, said: “This study has confirmed our long-held conviction that exploring for gas in the Southern North Sea can deliver significant value for shareholders and the UK as a whole.
“Should exploration wells prove commercial quantities of gas in line with expectations, then the scoping study economics demonstrate that cost effective development options are readily available, a key consideration for any operator or investor looking at the company’s exploration assets.”
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