London-listed Urals Energy PCL (UEN.LN), an independent oil company operating in Russia, traded up 5.1% Tuesday morning, as it said it more than doubled its proven and probable reserves last year.
At 0735 GMT, Urals Energy shares were trading at GBP1.98, up 5.1% or 10 pence.
The company said its proven and probable reserves as of Dec. 31 totaled 1.183 billion barrels of oil equivalent, up 104% from 579 million barrels a year earlier. The upgrade conducted by DeGolyer and MacNaughton was driven by the acquisition of the Taas Yuriakh field and upward revisions of reserve estimates at the company's Dulisma field.
The company's proven and probable liquid reserves - crude oil and condensate - rose 117% to 560 million barrels from 258 million barrels in the previous year.
"This is definitely positive news for the company," said Pavel Sorokin, an analyst at UniCredit investment bank in Moscow.
Sorokin noted, however, that the company still has problems with a low free cash flow. Urals Energy is securing loans with large Russian banks to fund its capital spending, and Sorokin said he expects the company will solve its cash flow problems.
Urals Energy has most of its production facilities in East Siberia and depends on the first phase of the East Siberia - Pacific Ocean oil pipeline to be finished next year.
"The company has the potential to significantly increase its production, when the pipeline comes on track," Sorokin said. Construction delays have already pushed the commissioning of the pipeline back more than a year.
"Further construction delays will harm the company," Sorokin said.