Shares in North Sea oil explorer Hurricane Energy (LSE: HUR) rocketed 46% higher this morning, after the firm released a very strong set of drilling results from its latest well.

The shares now trade at 35p, but I believe further gains may be possible. The Pilot well found a “very significant hydrocarbon column” of at least 620m, and test-flowed up to 11,000 barrels of oil per day without producing water.

Hurricane chief executive Dr Robert Trice now believes that the firm’s provisional analysis suggests the Lancaster field “is likely to be significantly greater” than the 207m barrels of 2C contingent resources previously projected.

Oil explorers often have a reputation for overstating good news, but in Hurricane’s case I think optimism is probably justified. So far, Hurricane’s modelling of the Lancaster field has proved to be very accurate.

Hurricane also has unusually strong finances. Despite the oil industry being in the middle of a major downturn, Hurricane managed to raise £52m by issuing new shares in April. As a result, it will be able to fund this year’s drilling programme without raising further cash.

The group’s decision to suspend farm-out discussions ahead of the Pilot well now looks smart. Resource estimates for Lancaster range from 62m to 456m barrels. If the firm’s drilling programme can firm up these estimates towards the upper end of the range, then the commercial value of the Lancaster field could rise sharply.

What’s next?

Hurricane is now proceeding to drill a horizontal side-track from the top of the Pilot well. This is expected to provide a second future production well and provide additional information about the Lancaster field to help with development.

If the horizontal well is successful, then I believe Hurricane shareholders could see further gains from here. Having said that, I’d expect the shares to pull back a little after today’s massive gains. A few days’ patience could be rewarded with a lower purchase price.

Next year’s big winner?

Shares in North Sea oil producer Ithaca Energy (LSE: IAE) have already risen by 312% from January’s low of 16p. But they remain 50% lower than they were two years ago, before the oil crash really got started.

Ithaca’s decision to develop the Greater Stella project wasn’t very well timed. But Stella promises to lift Ithaca’s oil production from 9,300 boepd to between 20,000 and 25,000 boepd. The firm’s finances should also be transformed.

Like Hurricane, Ithaca is well regarded by institutional investors and was able to raise $66m at 53p per share in October last year. This fundraising helped Ithaca toreduce its net debt from more than $800m in early 2015, to $606m at the end of June.

The start-up of the Stella field is expected to push Ithaca’s operating costs per barrel down to less than $20. Analysts are currently forecasting earnings per share of $0.11 for 2017, which puts Ithaca stock on a forecast P/E of 8.2.

That’s cheap enough, but I think those shareholders willing to wait until 2018 could see much higher levels of profit, as Ithaca’s debts are repaid and the oil market recovery gains strength.

I believe Ithaca remains a buy, for investors with a medium-term outlook.

Tomorrow's small-cap winner?

Ithaca and Hurricane have delivered big gains this year. But growth may be slower from now on. If you're looking for small-cap stocks with serious growth potential, then I'd urge you to consider the company featured in 1 Top Small-Cap Stock From The Motley Fool.

Our expert analysts believe that the company they've selected for this new report is significantly undervalued at current levels.

This stock certainly looks cheap to me1 Top Small-Cap Stock is completely FREE and carries no obligation. To download your copy today, just click here now.

Roland Head has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.