Salamander Energy Plc, a U.K. oil explorer active in Asia, soared the most in almost two years in London after saying it discovered oil off Indonesia.
Salamander shares jumped almost 12 percent to 208 pence, the biggest gain since March 18, 2011, valuing the company at about 534.5 million pounds ($842 million). Salamander led advancing stocks on the FTSE All-Share Index, and trading volume was more than five times the three-month daily average.
The South Kecapi-1 exploration well, the first in Salamander’s multiwell program in the North Kutei basin, discovered a combined 40 meters (131 feet) of net oil and gas, the company said today in a statement. It flowed about 6,000 barrels of light oil and 8 million cubic feet of gas per day in the Bontang contract area.
“The presence of oil is a positive surprise,” Phil Corbett, a London-based analyst at Deutsche Bank AG, wrote in an e-mailed report. The well could have flowed more than 14,000 barrels of oil a day if it wasn’t constrained by the testing equipment, he said.
Corbett has a buy recommendation on Salamander and predicts the shares will rise to 280 pence. Deutsche Bank acts as the company’s broker. Of 18 analysts who report their recommendations to Bloomberg, 11 have buy ratings on Salamander, six advise holding the shares and one advocates selling.
The North Kutei effort, targeting about 420 million barrels of oil and gas, “is now in full swing,” Alexander Holbourn, a London-based analyst at Bank of America, wrote in an e-mailed report. “The Ocean General rig will now drill the largest structure in the basin, the North Kendang-1 prospect.”