Premier Oil shares rocket after significant offshore Mexico oil find

Premier Oil shares rocket after significant offshore Mexico oil find

Shares in Premier Oil (LSE:PMO) climbed by more than 30% to 63.75p after it announced the discovery of a ‘world class’ oil reserve in the Gulf of Mexico, which could produce up to two billion barrels.

The independent UK oil firm made the discovery of the well, known as Zama-1, in partnership with US company Talos Energy and Mexican firm Sierra Oil & Gas.

Under the consortium, Premier owns 25% of the block, with Talos and Sierra taking 35% and 40% respectively.

“We have encountered a very substantial oil bearing interval which indicates over 1 billion barrels of oil in place, a commercial standalone development which adds materially to Premier’s portfolio of assets worldwide,” said Premier chief executive Tony Durrant.

In a company statement, Talos added that initial estimates for the well range from 1.4-2 billion barrels, and called the find a ‘historic and significant discovery’.

The discovery comes two years after the Mexican government relaxed laws surrounding foreign and private investment in its oil sector, opening up the sector for the first time in over 70 years.

@RGNonline