HOPES of a rebound in North Sea exploration activity have been dealt a blow after Jersey Oil and Gas said a find that generated excitement in the industry may be much smaller than hoped.

Shares in Jersey plunged 58 per cent yesterday after the oil and gas independent announced disappointing results from appraisal drilling on the Verbier find.

Jersey hit the headlines in October 2017 when it announced the find, which it said could contain as much as 130 million barrels oil.

Read more: North Sea minnow in focus after making bumper find in Moray Firth

Shares in the firm surged 500 per cent on the day it announced the discovery, which it made with a well drilled with Norwegian oil giant Equinor.

Yesterday Jersey said its estimates of the size of Verbier were likely to be revised towards the lower end of the initial range of 25 million barrels of oil equivalent to 130 million barrels.

“We are both surprised and disappointed by the results of our appraisal well,” said chief executive Andrew Benitz.

Equinor said the results of the well had not shaken its belief that the United Kingdom Continental Shelf (UKCS) has a lot more to offer in exploration terms.

Read more: Oil giant highlights North Sea opportunities amid surge in profits

However, the results of the Verbier appraisal may disappoint North Sea oil and gas sector champions.

News of the find boosted sentiment as firms grappled with the fallout from the crude price plunge that started in 2014.

This prompted firms to slash spending on exploration in the UK North Sea, in which drilling fell to a record low last year.

Verbier underlined the potential to make big finds in the mature North Sea as some giants looked to shift investment to areas they reckoned had better prospects, including the shale basins of the USA.

Industry body Oil & Gas UK said Verbier provided a signal of confidence in the future of the UK Continental Shelf and was the kind of development that should further persuade investors of the benefit of putting their money into the basin.

Jersey’s success also highlighted the role that independents could play in helping to stimulate interest in areas that had not caught the attention of bigger fish.

Read more: Oil and gas pioneer advances off Shetland

Jersey sold a stake in the acreage containing Verbier to Equinor, formerly known as Statoil.

“We maintain that the UKCS has more to offer and we will continue to actively explore for new opportunities as part of our strategy to unlock the remaining potential in both underexplored and more mature areas,” said an Equinor spokesperson.

The Verbier appraisal drilling formed part of a five-well UK exploration programme planned for this year by Equinor, whose UK offshore operations are run by Hedda Felin.

The spokesperson said the area containing Verbier remains interesting. Equinor will continue to evaluate the well results to update its understanding of the broader play.

Mr Benitz said Jersey Oil & Gas (JOG) is confident Verbier remains commercially viable. Production facilities for Verbier could be used to support a hub development linked to undeveloped discoveries that lie close by.

“JOG remains well-funded to pursue our growth plans and will continue to assess various acquisition opportunities as we move forward,” said Mr Benitz.

Jersey developed out of Trap Oil, which built a North Sea portfolio helped by the £30m acquisition of Banchory- based Reach Oil & Gas in 2011 but suffered hefty losses after the crude price plunged.

Separately, one of the private equity-backed firms that have launched expansion drives in the North Sea underlined confidence in the exploration potential of the area.

Read more: North Sea potential underlined by international financiers as oil firm expands

Neptune Energy said it will drill on a high potential prospect in the Central North Sea this year, without giving details. The company, which has operations around the world, made $906m profit before tax in 2018, its first year of production.

Shares in Jersey Oil and Gas closed ….