Valiant Petroleum (LON:VPP), the North Sea oil and gas operator, saw its share price jump by 9% to 695p this morning on news that it had discovered oil on its West Tybalt prospect. The company said it had encountered light oil in the four-way dip 'T1' structure in exploration well 211/8c-4z. The news follows a similar discovery in early May on the nearby East Tybalt prospect. Valiant said it believed the currently discovered volumes to be commercial and that the large oil column could lead to further upside in the block to the north and west.

The latest well encountered an oil bearing reservoir section in the Upper Magnus sands of approximately 550 ft. This was larger than pre-drill estimates, and pressure data collected imply up to three separate oil columns may be present with the largest totalling around 423 ft. The size of the overall oil column encountered suggests that the East and West Tybalt discoveries are in communication and a more complex geological setting is present which includes both stratigraphic and stacked trapping mechanisms.

Valiant noted that initial analysis suggests the reservoir quality in this location is better than that encountered in the original East Tybalt discovery well and the net pay is estimated to be between 100 ft and 200 ft. As with the original discovery well, Valiant has run an extensive data collection programme including a reservoir core, wireline logs, fluid sampling, pressure readings and a vertical seismic profile. Valiant holds an 80% working interest and operatorship of the blocks with the remaining 20% held by Agora Oil & Gas (UK). The joint venture partners have now decided to proceed with a drill stem test of the well with results expected in the next two weeks.

Valiant will use the data collected in the two Tybalt discovery wells to undertake a detailed reservoir and geological modelling exercise to determine the best way forward. It pointed out that the potential upside in the Tybalt area was subject to considerable uncertainty due to the complexity of the geology encountered and would need to be confirmed by further appraisal drilling.

Peter Buchanan, Valiant’s chief executive, said: “We are pleased that oil has been discovered in the second Tybalt well in a column which exceeded our pre-drill estimates. We will now work hard to incorporate the extensive data collected…

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