(Yicai Global) Oct. 21 -- Hainan Mining’s stock price soared by the daily limit after the oilfield developer backed by Chinese conglomerate Fosun International announced a major discovery at its crude oil and natural gas project in the South China Sea.

Hainan Mining [SHA: 601969] closed 10 percent higher at CNY7.30 (USD1.01) a share today. The stock is still down almost 40 percent this year.

An oil layer nearly 50 meters thick vertically was discovered recently in Block 03/33 of the Pearl River Estuary Area of the South China Sea, developed by its Roc Oil unit and state-owned China National Offshore Oil Corporation, Hainan Mining said late yesterday.

Drilling tests yielded a highly productive oil flow of more than 1,000 barrels per day, the Changjiang-based company added.

Roc Oil, an oil and gas developer registered in Australia, signed a cooperation deal with CNOOC for the block in 2015, holding 50 percent stake in the project. Hainan Mining bought 51 percent of Roc Oil from Fosun International in 2019 and Fosun has a controlling stake in Hainan Mining.

Roc Oil and CNOOC will conduct further research on the data acquired from exploratory wells and report reserves to government agencies to further research in the early stage of oilfield development. Roc Oil reported an oil and gas discovery in Block 03/33 in 2018.

As the peak energy season approaches, Chinese oil and gas firms have stepped up exploration. On Oct. 19, CNOOC announced the discovery of the first domestic deep-water deep stratum gasfield in the sea southeast of Hainan Island, with proven reserves of more than 50 billion cubic meters. The day before, Sinopec announced the discovery of about 387.8 billion cbm of shale gas in the Sichuan Basin.

Founded in 2007, Hainan Mining’s businesses include iron ore mining, oil and gas exploration, as well as commodity trading. The firm’s first-half revenue rose 34 percent from a year ago to CNY2.7 billion (USD372.7 million), but net profit fell 24 percent to CNY437 million due to rising operating costs, its earnings report showed.

Editor: Peter Thomas