An oil discovery offshore Mexico could contain between 1.4bn and 2bn barrels of oil, according to Talos Energy which is partnered with Premier Oil (PMO) and Sierra Oil & Gas on the Zama-1 well.

Premier, which has a 25% stake in Zama-1, calls the discovery ‘world class’. It provides welcome respite for the business which recently faced a difficult financial restructuring process.

Shares in Premier were up by a quarter in the immediate aftermath of the news and have now settled at 62p.

The well is the first to be drilled by a private sector company offshore Mexico. According to industry consultant Wood Mackenzie, Zama is one of the 15 largest global shallow-water discoveries in the last two decades. Drilling will now continue to test a deeper target.

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