Falklands oil and gas explorer Borders & Southern’s shares jumped more than 10pc on Monday morning after it increased estimates for Darwin discovery, and raised hopes the find could be technically and commercially viable.

The explorer made a ‘significant’ discovery of gas condensate – a petrol-like light oil – at the Darwin well in April, the first hydrocarbon find to the south of the disputed islands.

Initial assessments in August had shown that 130m to 250m barrels of liquid could be recovered, with a “mid case” of 190m barrels. On Monday Borders & Southern said further studies showed “the mid case could be as high as 210m barrels”.

The explorer also raised hopes that it could be technically possible and economically viable to extract the reserves, despite the difficult and remote conditions of the South Atlantic.

A feasibility study by external consultants found that “despite a relatively harsh environment and lack of local infrastructure, there is sufficient confidence in current proven technology to develop the discovery”.

Development would most likely involve a floating production and storage vessel to process the condensate, from which it could be offloaded to tankers for export.

Economic modelling had shown that a 200m barrel development project “would be commercial at an oil price as low as $65/barrel” while a 100m barrel development project could be commercial at at least $85/barrel. At prices of about $100/barrel, a 200m barrel development could be worth $1.7bn.

“Having determined that a gas condensate development to the south of the Falkland Islands is both technically and commercially feasible, the next step for the company is to prove up the recoverable volumes in its discovery with appraisal drilling and to confirm the predicted well flow rates with a well test,” it said.

“Due to the high confidence levels in the geophysical attributes, the appraisal drilling is considered to be relatively low risk. The Company is currently reviewing the rig market for the next drilling campaign.”

Borders & Southern said last year it was exploring funding options to help develop the find including seeking partners.

Its share price is yet to recover after plummeting 70pc in July when the follow-up to Darwin, the Stebbing well, was deemed not to be commercial and drilling was beset by technical problems.

Oil was found to the north of the Falklands two years ago by Rockhopper, which is now seeking to develop its assets.

Argentina has ramped up its rhetoric against British oil and gas companies in the region this year, but threats of legal action against them or their financial advisers have so far failed to disrupt the explorers’ plans.