Pancontinental Oil & Gas has claimed the first substantial hydrocarbon discovery off Kenya's coast, sending its shares up 91 per cent.
The Perth-based explorer said about 52m of net gas pay had been intercepted by the Mbawa-1 well, which is being drilled by Apache about 100km off the east African nation's coast.
Pancontinental is one of four partners in the permit and has a 15 per cent stake, sufficient for investors to rerate the company and send its shares up 10.5¢ to 22¢, on trading volumes of 69.3 million units.
Hartleys analyst David Wall immediately called it "the most significant discovery by a junior oil and gas company in recent times".
Apache is still drilling the well, with Mbawa-1 yet to reach its target depth of 3275m. The gas was intercepted at a depth of 2553m.
Yesterday's news will be devastating for those investors who sold out of Pancontinental a week ago on an inconclusive Mbawa-1 update, which was interpreted as a failure. It prompted Pancontinental's shares to fall 33 per cent to 11¢ on turnover of 42.7 million units.Mr Wall yesterday placed a 51¢ price target on Pancontinental.