(Alliance News) - i3 Energy PLC shares rose by more than 50% on Tuesday after it announced discovery of "a potentially very large oil resource" at its Serenity oilfield in the UK central North Sea.
Shares in i3 were up 52% at 42.64 pence in London in morning trade.
The UK-focused oil and gas firm said the Serenity 13/23c-10 well, located on its wholly-owned Serenity prospect, had preliminary well results consistent with i3's 197 million barrels stock tank original oil-in-place for the Serenity closure in the licence area.
The phase 1 development area will target 63 million barrels STOIIP through as many as four wells and i3's revised expected recoverable reserves now stand at 23 million barrels.
Then, phase 2 will target 396 million barrels STOIIP via further exploration drilling.
Once the planned plugging and abandonment of well 13/23c-10 has taken place, the rig will return to i3's Liberator oilfield, also in the North Sea, so that is can drill at pilot well for a future development well.
i3 has extended its rig contract with Borgland Dolphin and agreed a deferred payment structure, obtaining the right of first refusal on the Borgland Dolphin semi-submersible rig through to the end of January 2020. Borgland Dolphin will also partially defer payments into 2020 so that i3 has sufficient funding for the rest of its 2019 three-well drill campaign.
At present, i3 is advancing its funding options for Liberator's development and is in negotiation for up to USD100 million reserve-based lending facility provided Liberator results are successful.
In addition, i3 has issued 2.2 million warrants to subscribe for shares at a 56.85p exercise price to GE UK as payment for oilfield services.
i3 Energy Chief Executive Majid Shafiq said: "The discovery of the Serenity oilfield, a potentially very large oil resource, is a transformational event for i3 Energy plc.
"We now have proven oil in a second structure on our licenses. It is the culmination of three years of detailed geological and reservoir analysis and validates our regional model for the Liberator and Serenity oilfields and neighboring structures. We will now integrate data from the 13/23c-10 well into our geological modelling as we develop an appraisal and development plan for Serenity, which we believe is connected to the undeveloped Tain oilfield.
"This result also adds confidence to our revised mapping of the Liberator field, which utilises the same reprocessed seismic dataset now used to map the Serenity field, and integrates data from the recently drilled 13/23c-9 Liberator well. We now look forward to returning to Liberator where we'll continue the necessary drilling operations to progress that field towards development."
By Anna Farley; annafarley@alliancenews.com
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I3 Energy (I3E)