Exploration company Tullow Oil said its Mahogany-2 well off Ghana has hit a significant column of light oil, indicating its Jubilee field is bigger than previously thought and sending its shares soaring.
Tullow shares leapt as much as 20 per cent to a new high of 909 pence sterling in early trading in London today.
"The confirmation that Mahogany-2 is in communication with both Mahogany-1 and Hyedua-1, reinforces our interpretation that Jubilee is a major discovery and is likely to lead to a material upgrade of current resource estimates," Tullow chief executive Aidan Heavey said in a statement.
Analysts doubled their reserves estimates for the Jubilee field to around 1 billion barrels.
Oriel Securities' Richard Rose also said he was upgrading his net asset value for Tullow, excluding exploration, by 185 pence a share to 620 pence on the back of the find.
Tullow shares were up 16.5 per cent at 885 pence, the biggest rise on the UK's benchmark FTSE-100 index and valuing the firm at £8.2 billion (€10.5 billion).
Mahogany-2 lies in the West Cape Three Points licence, in which Tullow has a 22.9 per cent interest.
Other partners include US explorer Anadarko Petroleum and private equity-backed Kosmos Energy, both with a 30.875 per cent interest.
Tullow is the unit operator of the Jubilee field.
Agencies