Hurricane Energy is set to announce that surveys of its Halifax well in an area off the west of the Shetland Islands have identified a “kilometre-deep oil column” linked to its existing Lancaster find.
The firm is expected to say that this appears to be part of “a single large hydrocarbon accumulation”.
The geological formation is thought to contain more than one billion barrels of oil.
News of the find comes after the collapse of global oil prices in 2014, which has hit the North Sea industry hard and resulted in significant job losses.
Drilling began on the Halifax exploration well in early January and Hurricane said that the results would be due by the end of the month.
Hurricane needs to raise about $400 million (£318m) to develop the project and aims to start producing oil from the Lancaster field in 2019.
It was formed 12 years ago and has drilled five wells in the west of Shetland area.
Lancaster is expected to be confirmed as the “largest undeveloped field on the UK continental shelf”.