In an offshore petroleum production project (Project) involving the construction and operation of facilities such as oil drilling rig and undersea pipeline to drill and pump the crude petroleum oil below the sea-bed to above sea-level to a tanker berthed next to the oil rig. You are an investment manager of the project company undertaking this investment and has been tasked to identify potential risks inherent in this type of oil and gas project.

The Project is in commercial phase and has been producing crude petroleum profitably. The Project is fully funded by project bond. Remaining bond maturity is 3 years to maturity. Recent survey confirms that that the Project is located on top of a large oil field containing petroleum reserves significantly larger than current estimate. Explain the effect of this new discovery on the bond yield and bond price.