Don't call JR Ewing yet - the Weald 'oil find' is not proven

Outlook

An exploratory well-head at Horse Hill at a site in Surrey (Reuters)

If some of the more excitable reports are to be believed, the Weald is about to be transformed into West Texas. UK Oil & Gas Investments is claiming that more than 100 billion barrels of the black stuff is lurking under the ground near Gatwick airport. What’s more, the AIM-listed minnow insists it can extract up to 15 billion of them without any need for fracking. No wonder the shares – which trebled in price – were hotter than a Tex-Mex meal.

Who knows, there might even now be a reason to put that extra airport runaway in at Gatwick. JR Ewing needs a place to land his plane when he flies in from Dallas, y’all.

Please. For a start, consider what “AIM listed” means. With big, established companies, the rule is that you under-promise and over-deliver. For the tiddlers at the fag end of the old Alternative Investment Market, the reverse is true. This company is just one of a plethora of small exploration and production outfits, all breathlessly talking up their exciting prospects. Sometimes they come good. Even a stopped clock tells the right time twice a day.

The point is, when you’re engaged in a life-and-death struggle for attention and, crucially, the capital that comes with it, you need to talk big. Dave Lenigas, the chairman of UK Oil & Gas Investments and a veteran of this industry, is well aware of this – just as he will be well aware that estimates like this, based on test drilling, have a habit of changing dramatically over time. Like they did last year when no less than the British Geological Survey said it thought there was rather less oil than had been initially forecast in the Weald basin, and no shale gas at all.

Even if you accept that UK Oil & Gas Investments has a new discovery, and it isn’t hard to find sceptical analysts, the most important sentence in his company’s announcement of it is this: “Appraisal drilling and well testing will be required to prove its commerciality.”

So if the oil is indeed there, we don’t yet know if it is going to be worth extracting it.

None of this stopped people from betting on the company hitting the big time. You can join them, if you really want to. But I would only use money that you were otherwise going to punt on tomorrow’s Grand National.

This “find” is probably just about equivalent to having cleared the first fence of the Aintree course. It has another 29 to clear. Including all the really challenging ones.