Here's why Lion Energy (ASX:LIO) shares rocketed 132% this morning

The Lion Energy Ltd (ASX:LIO) share price has gone ballistic today, up 132%. Here's why this ASX energy company is soaring.

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If one was to look at some of the best performing ASX shares today, no doubt the Lion Energy Ltd. (ASX: LIO) share price would have caught the eye. Lion Energy shares are up an extraordinary 132.14% today to 6.5 cents per share.

Yes, Lion opened at 3 cents a share this morning. That's pretty much the price this company has been bumping along at for the past few months. But shortly after open, a rocket was lit under Lion shares and they soared as high as 8.5 cents. That was a gain of more than 183% at one point.

Even after the company settled at 6.5 cents a share, it's still an eye-popping 132% gain. Just for some context, that gain would have turned $10,000 worth of Lion Energy shares yesterday into a $23,210 position in 24 hours.

Lion is now in a trading halt, frozen at 6.5 cents a share. But let's take a look at what sparked this incredible share price appreciation today.

Lion Energy share price rockets on oil find

Today's dramatic share price appreciation is almost certainly the result of Lion Energy's announcement to the markets this morning before open. In this announcement, Lion informed investors that one of its ventures the Oseil Oil Field houses significantly higher oil reserves than was previously anticipated.

According to the company, Oseil's proven and probable reserves are now estimated at 4.37 million barrels of oil equivalent (MMbbl). Lion Energy has a 2.5% interest in Oseil. That means the company now estimates that its share of these oil reserves now stands at 0.109 MMbbl. That's a 203% increase on what its precious estimates were. 

Further, Lion Energy has also upgraded its estimates for Oseil's 'undeveloped' reserves. It was previously estimated that Oseil held 0.281 MMbbl in unproven reserves. That has been upgraded to 1.796 MMbbl.

With these massive upgrades in this oil field's estimated reserves, it's no surprise investors reacted so bullishly this morning.

What about the share trading halt?

As mentioned earlier, Lion Energy shares are now (as of 11:47 am) in a trading halt after their stellar performance this morning. At 12:53 pm, the company released a further release stating that the company has requested a trading halt, pending the release of an announcement.

Lion tells us that it will remain halted until 15 April at the latest. That's all we know for now. But Lion Energy shareholders will no doubt be pretty pleased with what has happened today. At the current share price, Lion Energy has a market capitalisation of $12.58 million.

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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