SHARES in exploration company Providence Resources soared today after it announced it had struck oil and discovered the first commercial well off the Irish coast.
The stock was up 12pc to €5.80 this afternoon as Providence said flows in Barryroe, 50km from the west Cork coast, are almost double the 1,800 barrels of oil per day (bopd) barrier set by the firm as being commercial.
Tests are also being carried out on gas flow rates in the area.
Tony O'Reilly, chief executive of Providence, said flow rates of 3,514 bopd have been discovered at 100-metre depth in the North Celtic Sea Basin.
"The well has also confirmed that the basal sands are laterally continuous, highly productive and that the oils are of a very high quality," he said.
The test area covered 300 sq km - equivalent to a medium to large North Sea oil field - and was bigger than expected with much better flow rates than first hoped for.
Providence Resources made the announcement on the Dublin and London stock exchanges.
This is the fifth time oil has been hit during explorations of the Barryroe licensing block, but the other wells fell below the commercialisation target when examined in the 1970s and 1990.
Mr O'Reilly said while the original drills confirmed oil accumulations, modern technology in the industry - including 3D surveys - had brought exploration on leaps and bounds.
He claimed the find was great for the other explorations around Ireland.
Tests will continue at sites off Wexford, Dublin, Shannon, Kerry and Northern Ireland over the next two years, he added.
"Barryroe is the pathfinder project for the Celtic Sea," he said.
"It's important for itself but it also helps raise the stakes in terms of other opportunities in the Celtic Sea."
Providence Resources and Lansdowne Oil and Gas, which has a 20pc stake of the exploration licence, are seeking partners for the drilling and development phases at Ballyroe.
Mr O'Reilly said he hopes the discovery will lead to the creation of an onshore oil industry in the country.
"We've always said as an Irish company we want to utilise as much Irish infrastructure and resources as we can," he added.
"We don't have an oil industry in Ireland, but I hope that something like Barryroe and the success we are getting in that will thrive more interest in creating more of an infrastructure in Ireland."
Mr O'Reilly said all the equipment, personnel and services he needs to work on a well come from Aberdeen.
"Why can't we have a surface industry in Ireland to service the Irish offshore?" he added.
Shares in Providence Resources soared last month after the company said it had found light crude oil in a large sandstone reservoir about 7,550ft under the sea off the south coast.
Providence holds an 80pc interest in the licence and operates it on behalf of its partners, San Leon Energy and Lansdowne Oil and Gas.