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UPDATE 1-EnCore finds more oil at Cladhan, shares rise

* Company now very confident that find is commercial

* Shares gain 8.8 pct (Adds detail, share price)

LONDON, Oct 4 (Reuters) - Britain's EnCore Oil EO.L said a sidetrack well at the Cladhan field in the North Sea encountered a substantial column of oil, strengthening its belief that the discovery is commercial and sending its shares up.

The oil explorer said on Monday that the additional well, drilled 1 kilometre to the south east of the original well, found 108 feet of net pay and no oil water content, and that the two side-tracks indicate an oil column of over 425 feet.

“It is still too early to put a precise figure on how large the discovery might be, but we are now very confident that we have a potentially significant commercial accumulation,” said Chief Executive Alan Booth.

Shares in the company, which were up 3.7 percent prior to the statement, gained as much as 13 percent before trading up 8.8 percent to 138.75 pence at 1118 GMT.

EnCore said it would carry out further tests to confirm its initial findings and would look to begin the next phase of drilling at the field before the end of the year or early in 2011 depending on rig availability.

Sterling Resources SLG.V, the operator of the Cladhan licence, owns a 39.9 percent stake in it, while German oil firm Wintershall holds 33.5 percent, EnCore 17 percent and Dyas the remaining stake.

In August, EnCore had said that the results from the Cladhan well were at the upper end of its expectations. This followed a discovery in June, the biggest in the North Sea since 2001 at the Catcher field, in which EnCore owns a 15 percent. [ID:nLDE65R0DE] [ID:nSGE679096]

The two discoveries have boosted EnCore’s shares by 764 percent so far in 2010, valuing the company at about 402 million pounds ($635 million).

(Reporting by Sarah Young; Editing by Rhys Jones)

$1=.6331 Pound

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