Desire Petroleum shares leapt 22p, or 23%, to 130p, after the firm said it had found oil in the Falkland Islands.
The company said that preliminary tests at the Rachel North well indicate it is an oil find, the second discovery this year offshore of the islands in the South Atlantic.
Stephen Phipps, Chairman of Desire, said in a statement: "It is highly encouraging that the initial results from the Rachel North well endorse both our findings and geological model from the previously drilled Rachel sidetrack well. This discovery combined with Rockhoppers' Sea Lion discovery confirms our belief that the eastern flank play fairway in the North Falkland Basin is highly prospective and that further oil fields will be discovered in this area."
The discovery threatens to open again a diplomatic dispute between Britain and Argentina, as both countries went to war in 1982 over the ownership of the islands. Argentina, which still claims sovereignty, is forbidding vessels to use its ports, while the Falklands have said no Argentine company will be given a license there.
