San Leon Energy rises on Barryroe update

San Leon Energy, the AIM-listed oil and gas explorer, rose following reports that studies on the Barryroe oil field will have a recovery rate of 17-43 per cent.

The latest update from Barryroe's operator, Providence Resources, on the oil discovery in the North Celtic Sea Basin, offshore Ireland, has outlined the size of the field in which San Leon Energy has a 4.5% net profit interest.

According to reports, Ireland- and UK-listed operator Providence has confirmed that the site should eventually yield 280m barrels of oil. Providence owns 80% of Barryroe, while AIM peer Lansdowne Oil & Gas has a 20% interest.

Analyst Dr Zac Davies from one of San Leon's house brokers, Fox Davies, has reiterated his "buy" recommendation and 60p price target for the stock. Davies said: "...although the company's interest is a net profit interest, following this update, it now starts to have fungible value attached to it; depending on the production value and precise nature of the agreement governing the interest, this could be in excess of $30m."

San Leon Energy has oil and gas projects in Poland, Albania, Morroco, Italy and the Netherlands.

The company numbers among its investors George Soros's Quantum Partners fund, with 18.94% of its equity, and Blackrock, with 10.86%.

All of the above is part of the first results of a half-decade long effort to increase global energy supplies after production in the previous oil majors, such as the Russian Federation, Saudi Arabia and the United States hit a glass ceiling.

In fact, just today in its monthly oil market report the Organization of Petroleum Exporting Countries (OPEC) has indicated that growth in non-OPEC oil supply (of 900,000 barrels a day) is expected to outstrip the increase in global demand (800,000 barrels a day).

Similarly, the International Energy Agency (IEA) yesterday estimated that Iraqi oil production may reach 8m barrels per day in 2035, with "[the country expected to make] by far the largest contribution to global oil supply growth over coming decades".

San Leon's shares were up 4.07% at 9.2p this afternoon.

CM