A re-drilled exploration well on the Isobel/Elaine structure north of the Falkland Islands has confirmed a play-opening oil discovery and uncovered more oil, boosting developers’ confidence of the offshore area’s commercial viability.

Although Premier Oil, with partners Falkland Oil and Gas Ltd. and Rockhopper Exploration, designed the Isobel-1 (14/20-1) well to drill the Isobel Deep sands again after work was halted in 2015 for operational reasons, the well was successful in penetrating five fans within the sand system, striking oil in not only the Isobel Deep, but also the Isobel, Elaine South, Emily and Irene reservoirs, Falkland said in a news release Jan. 11.

The news came as Rockhopper and Falkland move closer to completing their merger. The deal is expected to close on Jan. 18. The discovery also comes amid continued depressed commodity prices and a downturn that has caused some companies to cut back on exploration spending among other areas.

At more than 480 m (1,575 ft), majority interest holder Falkland heralded the southern Atlantic discovery as a “very large oil column.” The latest round of drilling—which reached a total depth of 3,014 m (9,888 ft)—led to 27 m (89 ft) of net pay in the Isobel Deep, Isobel and Emily reservoirs.

“Proving oil this far down dip in the Isobel Deep reservoir, in addition to confirming oil-bearing sands at a location so close to the edge of the various other fan bodies, is an outstanding result and hugely increases the likelihood that the Isobel/Elaine complex can become a third phase of development in the North Falkland Basin,” Rockhopper CEO Samuel Moody said.

Premier serves as the operator and holds 36% interest in license PL004a, where the well is located. Currently, Falkland holds 40% interest and Rockhopper holds the remaining 24% interest; however, the companies will hold a combined interest of 64% following the expected completion of their merger.

Moody said the discovery, coupled with Rockhopper’s other successes in the area, brings the company closer to proving the presence of a billion-barrel basin.

Located about 30 km (19 miles) south of Rockhopper’s Sea Lion discovery, the original Isobel-1 well drilled in May 2015 encountered oil-bearing sands. The well drilled to a depth of 2,526 m (8,289 ft), and Premier reported that oil was hit in the bottom 23 m (75 ft).

“These sands were at a higher than expected reservoir pressure and this resulted in an influx into the well. As part of the operations to remove the influx, oil was recovered from the well and appears similar in nature to Sea Lion crude,” Premier said in May.

The latest results confirm the potential for this part of the North Falkland Basin, said Robin Allan, exploration director for Premier Oil.

“This successful re-drill of the Isobel Deep oil sand along with the additional discovery of new oil-bearing sandstones, is extremely encouraging for the prospectivity of the area with a proven petroleum system and a number of prospects established,” Allen said.

There were no oil-water contacts, and no gas was encountered.

Falkland added that the well was not positioned for any specific target, regarding the five fan systems.

“As such, most of the fans were penetrated at their margins and FOGL expects that based on analogous systems, better quality reservoir will be present in the main bodies of the fans,” the company said. Although data is still being evaluated to determine future steps, the company believes the “Isobel/Elaine complex is likely to contain commercially viable quantities of recoverable oil.”

For the time being, the well has been plugged and abandoned.

Shares of London-listed Rockhopper rose 14.43% to $27.75 and Falkland’s rose 10.96% to $8.10, while Premier Oil’s fell 5% to $28.50.

The Guardian reported that the announcement was met favorably by analysts—for the most part, reporting that Liberum analysts said “the result should re-establish interest in North Falklands after the recent progress in the Mediterranean where we expect Rockhopper’s to build its Greater Mediterranean portfolio.”

The find could also bring good news for other players in the area, analysts at SP Angel said in the article: “While testing will have to be undertaken before commerciality can be assessed, we believe that this is good news, and with Sea Lion already a commercial discovery, we believe that the barriers to commerciality are lower than they would otherwise have been.”

Velda Addison can be reached at vaddison@hartenergy.com.