North Sea oil find lifts groups

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Shares in a number of UK oil companies surged on Monday after they announced what could be the largest discovery of North Sea oil in almost a decade.

The four Catcher fields, owned in part by Encore Oil and Premier Oil, could contain as much as 300m barrels of oil, of which half could be recoverable, the companies said on Monday.

Analysts said the Catcher fields could represent the largest North Sea oil discovery since the 500m barrel Buzzard find in 2001, which produces 200,000 barrels of oil a day.

“This is one of the largest North Sea oil discoveries over the past decade,” said Richard Rose, an analyst at Oriel Securities.

“The typical size of recent discoveries has been about 20m-30m barrels. At this stage 300m barrels of oil in place in the Catcher fields is not proven, but is possible if further appraisal drilling is successful.”

The fields – the drilled Catcher, Catcher East and the still-to-be appraised Catcher South West and Catcher North – are operated and 15 per cent owned by Encore, with Premier, the largest stakeholder with 35 per cent. Wintershall has 20 per cent, while Nautical Petroleum and Agora Oil hold 15 per cent each.

Encore shares jumped 46.5 per cent to 52p, Premier gained 84p, or 7 per cent, to close at £12.66, and Nautical rose 21.8 per cent to 169p.

Premier, the UK’s third-largest independent oil explorer by value, acquired its holding in Catcher via its purchase of Oilexco’s North Sea assets last year.

Tony Durrant, Premier’s finance director, said his company could look to take over operatorship of the field from Encore, but that any change would depend on an agreement with the other owners.

“Anyone looking at this partnership would see some partners might not be the same people who would develop this field,” he said. “Some companies place greater emphasis on discoveries, while we have proven that we have the capability to operate.”

Based on 300m barrels and a 50 per cent recovery rate, Premier would gain a net 52.5m barrels – adding 20 per cent to its 2009 year-end proved and probable reserves, Phil Corbett, an analyst at RBS, said.

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