“Wireline pressure measurement and sampling tool tests were unsuccessful due to tool seal failure in the hole,” said Karoon managing director Bob Hosking.

“Karoon is continuing to evaluate this interval with a view to make a decision on flow testing in the next few weeks.

“The well intersected approximately 3m net of thin sands at the top of the Crayfish Group equivalent with cuttings showing good hydrocarbon fluorescence with an associated increase in mud-gas readings. Wireline log interpretation indicates sandstones with porosities around 12% with oil saturations up to 50%.”

Karoon said the well had been suspended and the rig is off hire after being drilled to a total depth of 2000m. Final results of the CBM coal core analysis, taken from higher in the well, are expected by the end of January.

The company has 100% interest in the well, which is located in PEP 162 and EL 4537, approximately 100km south-east of Melbourne.