Exploration group Providence believes its Barryroe oil well off the south coast also contains commercial quantities of natural gas.

Last week the firm said Barryroe, 50km off the Cork coast, produced oil at a rate of 3,500 barrels per day, indicating that the find is commercially viable.

It said tests on a natural gas reservoir that lies above the oil indicated it too is commercial.

The combined flow rates of oil and gas could amount to the equivalent of more than 6,000 barrels of oil per day. Moreover, the gas well alone could produce the equivalent of 3,800 barrels a day, according to Providence.

Chief executive Tony O’Reilly jnr confirmed that the gas find was also more productive than the company originally expected.

“It is particularly pleasing . . . in terms of reservoir development and more importantly, oil and gas flow rates,” said Mr O’Reilly.

He added that the gas well lies just 3km from existing natural gas pipelines which were originally installed to service the nearby Seven Heads field.

Job Langbroek, analyst with stockbroking firm Davy, set a £10 share price target for Providence stock. “This all adds up to a very successful close to the Barryroe well,” he said.

Providence shares closed 0.9 per cent up at €5.80 on the Dublin market yesterday.