In separate statements, Adelphi Energy, Aurora Oil & Gas and Eureka Energy today said the wireline logs were run over the well between 16,998 feet (5182m) and total depth of 20,896ft.

“Interpretation of wireline logs over the primary target indicates that an aggregate of 90ft of potential reservoir is gas-saturated and may be capable of commercial production after fracture stimulation,” the companies said.

“Based on the log interpretation and the gas indications obtained while drilling, the well participants have elected to run and cement a production liner, fracture stimulate and test the zones of potential interest.”

Total cost of these operations is estimated at $US2 million ($A2.5 million), the company said.

By 6am Texas time yesterday, the production liner was in the process of being run to total depth prior to the well being prepared for temporary suspension so that the deep drilling rig can be released.

Adelphi said preparation of the well for fracture stimulation and flow testing will be carried out with a smaller workover rig.

After the primary target has been tested, the joint venture will make a decision on production testing the shallower carbonate reservoirs previously identified as potentially productive.

In early October, the JV announced that while the well had encountered 92ft of gas pay in a secondary target, the zone might not flow at commercial rates.

Sugarloaf-1 partners are Texas Crude Energy (operator with a 41.5% stake), Aurora (20%), Adelphi Energy (20%), Eureka Energy (12.5%) and Empyrean Energy (6%).