The Avaldsnes/Aldous Major South find, which could already be the biggest discovery so far this year worldwide, may hold 1.2 billion to 2.6 billion barrels of oil equivalent (boe), Sweden's Lundin said after more than quadrupling the size of Avaldsnes.
At 2.6 billion barrels, it would be the third-largest made on the Norwegian shelf, surpassed only by the Statfjord and Ekofisk fields, each with more than 3 billion barrels, which kicked off Norway's oil era in the 1970s.
Norway's Statoil, a partner in the field, and the Norwegian Petroleum Directorate, which manages the Nordic country's hydrocarbon resources, declined to confirm Lundin's numbers for Avaldsnes, however, striking a note of caution.
"This field is a giant and one of the biggest ever on the Norwegian continental shelf," Lundin CEO Ashley Heppenstall told a news conference in Oslo.
"It highlights the continued prospectivity of what many viewed as a mature region with limited remaining potential."
Lundin shares leaped 34 percent at the opening of the Stockholm bourse and were up 30 percent to 115.40 Swedish crowns at 1212 GMT. Shares in Statoil were up 3.7 percent to 127.3 Norwegian crowns.
The upgrade lifted estimates for the combined Avaldsnes-Aldous Major South discoveries from a previous 500 million to 1.2 billion boe.
Avaldsnes is now estimated at 800 million to 1.8 billion boe, up from 100 million to 400 million previously.
Aldous Major South, with another 400 million to 800 million boe, is covered by a separate exploration license but the two have been shown to be connected.
There is still a potential to raise the lower end of the Avaldsnes estimate by 100-200 million from 800 million, Lundin's CEO said.
"I don't know exactly how to describe this. Fantastic is the word that I think of first. It is truly unbelievably good news," said Daniel Raavik, an analyst at Handelsbanken.
The oil output of Norway, the world's eighth-largest oil exporter and the second-largest for gas, has got a boost recently from to the Aldous/Avaldsnes discovery and the Skrugard find in the Arctic North after having been on the decline for the past decade.
Oil majors such as ConocoPhillips, BP and ExxonMobil have largely written it off as a significant region exploration, focusing instead on areas such as the Gulf of Mexico, Brazil or Angola.
Arctic Securities analyst Trond Omdal said the news was "extremely positive" for Statoil, a partner in Avaldsnes and the operator of Aldous Major South.
"It means that the operating cost per barrel will be reduced," he said. "Based on today's oil price — and if the resource estimates is up towards 2 billion barrels, this could mean that as much as 14-15 crowns per share for Statoil."
The Aldous Major South was first announced in August, followed by the news that it was connected to Avaldsnes a few days later.
Statoil confirmed there was an upside potential at Avaldsnes but did not confirm Lundin's figures.
"We've chosen to continue to gather and analyze data. We want to finish the well we're currently drilling on Aldous Major South," said Statoil spokesman Ola Anders Skauby.
Skauby declined to comment on why the partners didn't publish a joint assessment and on whether there had been any disagreement between them on the timing of the release.
The Norwegian Petroleum Directorate also said it would await more exploration drilling results before estimating Avaldsnes' size.
At the time of the Aldous Major South discovery, it said the find could help slow a decline in oil production that had been set to accelerate after 2020.
Lundin said it saw no reason to delay its own publication, even if Statoil or the NPD were not ready.
"It's understandable that Statoil wants to await the result of its own explorations, but we're comfortable with the estimates we've presented today," Heppenstall told Reuters.
The quality of the oil at Avaldsnes is so good, Lundin said, that it could fetch a premium over the Brent benchmark price and that the recovery rate at the field could be 70 percent, which could add to Avaldsnes' resource estimate.
The average rate of recovery at a Norwegian field is around 46 percent.
Lundin is the operator of Avaldsnes with a 40 percent interest. Statoil has a 40 percent interest, and Maersk Oil, a unit of Danish shipping giant Maersk, has a 20 percent interest.
Statoil is the operator of Aldous Major South and has a 40 percent stake. The other partners are Det norske oljeselskap with 20 percent, Lundin with 10 percent and Norwegian state-owned firm Petoro with 30 percent.
