The company is using the Aztec Rig-7 to drill the NS-3 appraisal well, which is located 1.4km south of the Na Sanun-1 well where oil was flow-tested at up to 1400 barrels per day for a short time before suddenly watering out.

Carnarvon said the early watering out of the well may not be a valid test of the reservoir’s oil potential, as a cement bond log showed cementing operations were unsuccessful beneath a depth of 466m.

The Na Sanun discovery is situated in a separate down-faulted structure to the Na Sanun East oil field, where the POE-9 oil discovery well was drilled at the end of last year’s Phase 1 drilling program comprising nine wells.

Carnarvon said POE-9 continues to perform well on an extended production test, confirming the good reservoir potential of these fractured volcanics.

If NS-3 is successful, the well will be immediately put on production and further wells planned to evaluate the extent and potential of the Na Sanun discovery will be drilled this year, the company said.

A second contracted drilling rig, Aztec Rig 14, is expected to start working for Carnarvon this month, beginning with the appraisal and initial development of the Na Sanun East oil field surrounding the POE-9.

The two rigs will be drilling continuously for the rest of this year and into 2008.