"We have something, both the mud and electric logs tell us that. It's probably oil, but we have to prove the formation will produce, so it's safer to err on the side of caution," NZOG exploration manager Eric Matthews told EnergyReview.Net from Sydney today.

"Exactly what type of test program still has to be decided by the partners and, although the well has been cased, we need to complete it in the best way possible as Mount Messenger sands gas can contain carbon dioxide and water and can be quite corrosive."

NZOG and its partners, Indo-Pacific Energy and Greymouth Petroleum, drilled Tabla-1 within the Ngatoro mining licence PMP 38148 and the well reached its target depth of 1600m last Friday. It encountered a 10m gross hydrocarbon-bearing interval below 1419 metres within the Eocene-aged Mt Messenger Formation. A second expected target zone proved to be water-bearing.

Matthews said flow testing should take place in the next four to six weeks once the appropriate program and test equipment had been decided. Indo-Pacific has said Tabla's potential reserves should be between those of Goldie (another Ngatoro permit oil pool) and Ngatoro itself, which Crown Minerals estimates at 1.7 million barrels and 4.6 million barrels respectively).