SHARES in North Sea oil and gas minnow Jersey Oil & Gas have surged around 500 per cent after the company made a discovery it reckons may contain 130 million barrels in the Moray Firth.

Jersey struck oil 60 miles north east of Aberdeen with a well it drilled with Norwegian giant Statoil, which highlighted the significance of the find.

Jenny Morris, head of exploration in the UK for Statoil, said the Verbier discovery proved that there could be significant remaining potential in the mature North Sea.

She added: “We are convinced of the remaining, high-value potential on the UK continental shelf and the Verbier result certainly gives us the confidence and determination to continue our exploration efforts.”

The drilling success provides a welcome boost for the North Sea oil and gas industry, which has been mired in a deep downturn triggered by the slump in the crude price since 2014.

The number of exploration wells drilled in the North Sea fell to a record low of 14 last year.

Coming soon after Hurricane Energy won backing to develop the giant Lancaster field off Shetland, the Verbier find may encourage other firms to look again at the North Sea.

It could provide a lucrative vindication of the decision made by the partners in Verbier to persevere with drilling after the well failed to find oil in the first area targeted.

Statoil suffered disappointment with two other UK explorations wells this summer.

The find is a triumph for Jersey Oil & Gas, which had a market value of just £5.6 million before the result of the well was announced yesterday.

Jersey was an early believer in the potential of the Verbier prospect. It sold a 42 per cent interest in the licence to Statoil for $1.2m in August last year.

Statoil agreed to pay up to $25m towards the costs of the first well on the licence.

The deal helped the Jersey management team with its attempts to generate some value from the rump of the assets amassed by a North Sea business that hit trading problems amid the crude price plunge.

Led by chief executive Andrew Benitz, Jersey has developed out of Trap Oil, which built up a big North Sea portfolio helped by the £30m acquisition of Banchory- based Reach Oil & Gas in 2011. Trap Oil lost £44 million in 2014.

Mr Benitz said yesterday that Jersey was delighted by the results of the Verbier sidetrack well.

Jersey noted Statoil’s initial estimate that the discovery contained between 25 and 130 million barrels of oil equivalent.

The well underlined the wider exploration potential of the licence, which contains another prospect.

Statoil has a 70 per cent interest in the licence.

It acquired a 28 per cent interest from Japanese-owned Cieco for $0.8m in August last year.

Jersey has an 18 per cent interest with Cieco on 12 per cent.

London-based Cieco is owned by the Itochu conglomerate.

Statoil has been investing heavily in the development of the giant Mariner oil heavy field East of Shetland. The firm expects the field will come onstream next year and provide a long term cash flow over 30 years.

Shares in Jersey Oil and Glas closed up 270.5p at 328p, leaving it with a market capitalisation of £32.5m.