Africa-focused oil and gas explorer FAR Ltd said on Thursday that its two offshore blocks in the Gambia could potentially hold 1.2 billion barrels of oil.
FAR, which operates and owns 50% of the two offshore licences, said it was entitled to about 621 million barrels and was preparing to start drilling next year.
However, further drilling would be needed to estimate how much could be produced by the Australian explorer.
The company is re-examining data for the A2 block to help it identify which prospect to drill in 2020, Managing Director Cath Norman said.
Under the licence agreement with the Gambian government, FAR agreed to drill one well in the first two years in either block.
FAR's assessment came weeks after the Melbourne-based company bought an extra 10% of the two blocks, raising its ownership to 50%. The deal gave PC Gambia, a unit of Malaysian state-owned energy giant Petronas, the remaining half.
Earlier in the session, company shares surged as much as 9.4%, but reversed course as oil prices slipped. Stock was down 0.9% at A$0.0525, as of 0440 GMT.
(Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Sherry Jacob-Phillips)