Shares of Reabold Resources and Union Jack Oil rose on Thursday after the firms said well testing has revealed that their West Newton project near Hull in East Yorkshire is “a significant oil and gas discovery rather than the gas discovery as originally anticipated.”

Shares in Reabold were up about 10%, with Union Jack Oil shares up 7%.

Reabold said it holds a 24% economic interest in the licence via its 36% holding in Rathlin Energy (UK) Ltd, operator of the well.

Union Jack Oil said it holds a 16.665% interest in the licence “containing the West Newton A-1 discovery well and the West Newton A-2 appraisal well.”

Union Jack Oil executive chairman David Bramhill said: “The confirmation of a major oil discovery at the West Newton project is highly encouraging compared to its original perception as a substantial gas discovery.

“We now await a revised CPR that Union Jack expects will provide details on the oil in place, gas in place and recoverable volumes.

“Given the positive value implications of a major onshore oil development, rather than predominantly gas as originally believed, we expect this will also lead to a meaningful uplift in the NPV10 calculations in the Revised CPR.

“The EWT will now be paused to allow the test equipment to be reconfigured to design and implement a revised production test which will better reflect the increased liquid hydrocarbon content of the production fluid.

“We believe this to be necessary in order to maximise the information derived from this EWT test information to drive this important onshore oil project forward.

“We now believe that West Newton will become a significant oil development project for Union Jack, our joint venture partners and for the onshore UK hydrocarbon industry.”

Reabold co-CEO Stephen Williams said: “The realisation that we appear to have a 45 metre oil column is a significant and exciting development in the evaluation of this cornerstone asset.

“We particularly look forward to further analysis and testing results, as well as a proposed updated CPR, as, alongside our partners, we establish the optimum forward programme to maximise value out of this field for Reabold shareholders.

“In addition, the next well at West Newton will be planned to target the deeper Cadeby formation, which has the potential to add significant further resource upside.

“There are also other follow on exploration targets within this extensive licence area.”