Shares in Ireland-based explorer Circle Oil have jumped by more than 25 per cent after it confirmed that it had discovered a functioning oil and gas environment in Tunisia, setting the scene for a find of approximately 100 million barrels of oil.

“The stratigraphy encountered in the well was exactly as prognosed,” the company said in a statement, announcing the results of its El-Mediouni-1 (EMD-1) well.

“Very good light oil shows were encountered both in the Lower Birsa carbonate primary target and the Upper Ketatna carbonates secondary target over a combined interval of 133 metres.”

Circle oil started drilling the (EMD-1) well on 8 June 2014 and drilled to a depth of 1,200 metres.

It says results from the well confirm the existence of a working petroleum system in the Mahdia Permit and proved the “robustness” of the El-Medinouni trap, pointing to a recoverable oil reserve of 100 million barrels.

Due to problems with the structure of the rock being drilled Circle Oil had to eventually suspend the well.

Speaking about the well Circle Oil CEO Chris Green said, “We are extremely pleased to add this potential large discovery to our portfolio in Tunisia.  It is unfortunate that the hole conditions became untenable so quickly and we were unable to conduct a full log evaluation of the hydrocarbon column in the well. Nevertheless we intend to take our appraisal effort forward on the Mahdia Permit as quickly as possible following this proof of the El-Mediouni petroleum accumulation and will provide further updates of our plans in due course. We look forward to working with Etap on the next stage of this project.”

Circle Oil has been granted a six-month extension to the Mahdia permit, extending it to January 2015.

It has the right to elect for additional renewals of the permit for three years each with a commitment of one well per period.