A bunch of investors in U.K. Oil & Gas Investments PLC UKOG, -19.50% literally hit paydirt on Thursday.
Shares of the exploration-focused company rocketed 200% at one point in London, and closed up 169%, after UKOG said a discovery in the south of England looks likely to deliver North Sea-beating amounts of oil.
“We think we’ve found a very significant discovery here, probably the largest [onshore in the UK] in the last 30 years, and we think it has national significance,” Stephen Sanderson, UKOG’s chief executive, told the BBC.
That discovery? Only a potential total of 100 billion barrels of oil, according to estimates from petrophysical analysts Nutech, released by UKOG Thursday. The area around Horse Hill near Gatwick Airport could hold 158 million barrels per square mile, Nutech’s analysis of an exploratory well showed.
Even though UKOG said only a small fraction of that amount could be pulled from the ground, the significance of the find stacks up against the fact that the North Sea has produced only about 45 billion barrels in 40 years, as the BBC noted.
The Horse Hill licences cover 55 square miles of the Weald Basin in southern England, in which UKOG has a 20.36% interest.
The exploration company is tiny, with a stock-market value of about 18.7 million pounds ($26.60 million) as of Wednesday evening, before the news hit, but the energy sector was already abuzz after Royal Dutch Shell’s RDS.A, -0.45% RDS.B, -0.52% $69.6 billion buyout of BG Group BG., +1.12% on Wednesday
