Austin Exploration Ltd’s (ASX:AKK) shares have surged today...

Austin Exploration Ltd’s (ASX:AKK) shares have surged today after intersecting a significant 790 feet column of oil in the Pierre formation at the company’s flagship Pathfinder project in Colorado, U.S.A.

The oil was discovered in both drill cuttings and on the drill string which was saturated and dripping in crude oil.

Testing of the well is expected to take one month to analyse its production potential.

Bullishly, the recovered crude oil has a green colouration which is the same type of oil found in neighbouring oil fields, which have produced 15 million barrels of oil.

Austin has ordered production facilities, which include a pump-jack, tank batteries and flow lines. Testing of the well will begin shortly to analyse its production capabilities.

The Pathfinder project, spread over the DJ Basin which is one of North America’s most prolific oil and gas producing basins, is large enough to accommodate more than 350 wells.

Austin had been divesting non-core assets over the last few months, selling minority interests in Texas and Mississippi properties to raise A$2.78 million.

Following the sale, the company has completely eliminated debt, by paying down a USD$1.5 million debt facility with ANB Bank.

Austin is well funded to ramp up operations after closing a A$1.73 million underwritten renounceable entitlement offer earlier this month.

The new oil discovery is likely to be commercial is timely as Austin is aiming to achieve profitability by being a low cost oil producer in a depressed oil market.

Trading volume was a solid 325 million shares.