Company chief executive Dave Bennett said from Wellington today that the deviated sidetrack well had encountered some good quality Tariki sandstones at the top of the formation, around the 2817m mark, and some lesser quality sands further down towards the 3028m target depth.

"Logging indicates the presence of producible hydrocarbons in the top 35 metres and also the possibility that all other sands below this may also contain producible hydrocarbons. An interval of 35 metres is not insignificant and essentially the well looks as if it will come in on prognosis; it is looking promising."

Casing was being set so a drill stem test, over at least the top interval, could be carried out. The likely length and nature of the test program would be decided later this week once logging had been completed, added Bennett.

Last week Indo-Pacific deviated the Kahili-1A sidetrack well some 150m westward in order to hit the targeted Kahili structure instead of going through the Tariki thrustbelt. Aussie partner Tap Oil estimates potential recoverable volumes at Kahili could be of around 14 mmbbls of oil and 18 bcf of gas. Earlier this year the Kahili-1 well encountered a 58.5 metre gross oil column and a four-hour drill stem test recovered a small amount of oil.