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(Alliance News) - Reabold Resources PLC and Union Jack Oil PLC on Thursday said well testing has revealed West Newton project to be a significant oil and gas discovery, instead of the gas discovery originally expected.
Shares in Reabold were up 15% at 1.46 pence in London in morning trade.
Initial petrophysical analysis of the West Newton A-2 well in Yorkshire, England, found an overall hydrocarbon column of 65 metres, including 45 metres gross oil column and underlying 20 metre gross gas column.
Given this discovery, the extended well test has been put temporarily on hold so that it can be optimised to evaluate the oil column.
Reabold's economic interest in in the licence is 24% and is held via the company's 36% holding in Rathlin Energy UK Ltd, which operates the A-2 well.
Rathlin and partners, Reabold said, plan to commission a revised competent persons report after the extended well test is done "to re-assess the volumes of hydrocarbons and economics of the West Newton project".
Reabold Co-Chief Executive Stephen Williams said: "The realisation that we appear to have a 45 metre oil column is a significant and exciting development in the evaluation of this cornerstone asset. We particularly look forward to further analysis and testing results, as well as a proposed updated CPR, as, alongside our partners, we establish the optimum forward programme to maximise value out of this field for Reabold shareholders.
"In addition, the next well at West Newton will be planned to target the deeper Cadeby formation, which has the potential to add significant further resource upside. There are also other follow on exploration targets within this extensive licence area."
Union Jack, which has a 17% interest in the licences containing the West Newton A-1 discovery well and A-2 appraisal well also noted the oil discovery.
Union Jack Executive Chair David Bramhill said: "The confirmation of a major oil discovery at the West Newton project is highly encouraging compared to its original perception as a substantial gas discovery. We now await a revised CPR that Union Jack expects will provide details on the oil in place, gas in place and recoverable volumes. Given the positive value implications of a major onshore oil development, rather than predominantly gas as originally believed, we expect this will also lead to a meaningful uplift in the NPV10 calculations in the revised CPR."
Shares in Union Jack were up 9.4% at 0.31 pence on Thursday.