Premier Oil’s major Mexican oil discovery boosts shares

Premier Oil’s shares rocketed as much as 38 percent on Wednesday on news it discovered potentially more than 1 billion barrels of oil off the coast of Mexico, a major victory for Latin America’s No. 2 economy since the historic opening of its energy sector.Premier, which holds a 25 percent interest in the block alongside Talos Energy and Sierra Oil and Gas, said estimates for the Zama-1 well were in excess of 1 billion barrels, which could extend into a neighboring block.The news of the discovery, in the first shallow-water offshore exploration well drilled by the private sector in Mexico since the country’s 2014 energy sector opening, sent Premier’s shares rocketing as much as 38 percent on the London Stock Exchange and helped the peso strengthen 0.70 percent to 17.785 per dollar.In afternoon trading in London, Premier Oil shares were up 34 percent at 61.83 pounds.The find also hands the government of President Enrique Pena Nieto, which ended state-oil firm Pemex’s decades-long monopoly, a key victory as Mexico prepares to embark on fraught trade, security and immigration talks with U.S. President Donald Trump’s administration.Premier Oil’s Chief Executive Tony Durrant said the discovery “adds materially” to Premier’s portfolio of assets.”(The) Zama-1 discovery announcement appears about as material as we could possibly imagine at this early stage,” Jefferies analysts wrote in a note.The project is jointly owned with Talos Energy, which acts as operator and has a 35 percent stake, and Sierra Oil and Gas which holds the remaining 40 percent.

Source: Premier Oil’s major Mexican oil discovery boosts shares

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