Scottish oil and gas exploration and development company Cairn Energy yesterday announced a second oil discovery off the coast of Senegal, sending its shares up by as much as 13%.
The Edinburgh-based energy firm, which currently has no producing assets, has found oil at its SNE-1 well around 100km off the coast of the west African country.
Preliminary estimates indicate the well, at a depth of 1,100 metres of water, could hold 150-670 million barrels of recoverable resources.
It is 24km from its FAN-1 well where it found oil last month.
The successful oil discoveries could provide Cairn with an option to sell parts of its 40% stake to raise cash for its 2015 exploration work in north-west Europe and Morocco.
Cairn is the operator and 40% owner of three blocks off the coast of Senegal, while other stakeholders include oil major ConocoPhillips, which owns 35%.
Simon Thomson, chief executive, said: “This is a significant oil find for Cairn and Senegal and, based on preliminary estimates, is a commercial discovery and opens a new basin on the Atlantic Margin.
“On completion of the SNE-1 well the joint venture, along with the authorities in Senegal, will evaluate all of the information to understand how best to take forward these basin-opening discoveries with an appraisal drilling programme in 2015.
“Cairn has additional prospects and leads that offer further exploration potential across this large acreage position in west Africa.”
The oil explorer has been unable to tap its $1 billion stake in Cairn India, a business whose backdated taxation practices are being investigated by Indian authorities.
When he revealed earlier this month that Cairn Energy was investigating the SNE-1 site, Mr Thomson said Cairn remained focused on maximising value for shareholders from disciplined capital allocation across a balanced asset base.
Shares rose 19.10p to 177p.