The well is being drilled directionally from the Xyris-1 surface location to the target bottom hole location approximately 923 metres to the south west of the surface location.

Since the last report the well has been drilled ahead to a total depth of 2933 metres measured depth and wireline logs have been run. The top of the Dongara Sandstone unit was encountered at 2806 metres measured depth.

Initial wireline logs and drilling data indicate the presence of a gas column of some 28 metres in Dongara Sandstone reservoir of similar quality to the nearby Xyris-1 well. The reservoir elevation and gas column were encountered substantially as predicted.

“Xyris South-1 has confirmed the presence of the interpreted fault compartment to the south of the gas accumulation discovered by the Xyris-1 well and has again demonstrated the ability of the existing 3D seismic data to provide predictable well outcomes,” said ARC managing director Eric Streitberg.

“The well has been drilled directionally from the Xyris-1 location, so it is adjacent to the almost completed Xyris gas processing facility and it can be quickly and efficiently brought into production. The well will provide additional deliverability for existing and new gas contracts. It will be particularly welcome for peak load supply during the coming high-demand summer months.”

Subject to joint venture approval, the well will now be cased and suspended as a future gas producer.

Participants in L1 and L2 (excluding the Dongara, Mondarra and Yardarino fields) and Xyris South-1 are: ARC Energy Limited 50% (operator) • Origin Energy Developments Pty Ltd - 50%.