Major discovery made off WA

Apache strikes off WA: Phoenix South-1 is being drilled using the semi-submersible Atwood Eagle

US independent Apache Energy has confirmed four oil columns in the Phoenix South-1 well on the North West shelf offshore Western Australia.

Early indications showed there could be 300 million barrels of oil in place, the company said on Monday.

Joint venture partner Carnarvon Petroleum announced this was one of the most “significant developments in Australian oil and gas in recent times”.

Carnarvon said it was too early to give a definite number on oil volumes but further technical evaluation will be able to shore up numbers.

Six oil samples were recovered from the well, which were assessed to be light oil. The preliminary permeability shows the potential for a productive reservoir.

The company was placed in a trading halt in anticipation of this announcement.

Carnarvon managing director Adrian Cook said this was a “major new discovery”

“The implications on the rest of our acreage are still being assessed, but the potential is extraordinary,” he said.

“Despite some initial challenges and setbacks, this well has delivered a significantly better outcome than any of us could have imagined.”

The company said this discovery has real implications for the rest of the permit and surrounding acreage of which Carnarvon holds a stake.

Work is underway to evaluate the Roc-1 well in WA-437-P, which Apache has just committed to after there was speculation mounting that the company would be exiting its Australian acreage.

Apache and JX Nippon formally notified Carnarvon on Monday that they committed to the drilling of the Roc prospect.

In agreeing to participate, the players will cover costs of up to US$70 million.

“I am delighted that Apache and JX Nippon have committed to drilling the Roc prospect and to join ourselves and Finder Exploration as we look for more exploration success in the area,” Cook said.

“At this stage I expect the Roc well will be drilled in 2015 with an Apache contracted jack-up drilling rig.”

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