The company said the reservoir top, the oil-water contact and the indicated reservoir quality were consistent with the pre-development studies and would be validated by further petrophysical work in the next few days.

The pilot hole program, which finished Saturday, was designed to confirm potential reserves in the southern sector of the field by evaluating the reservoir structure and quality in that area and to optimise the location of the Galoc-3 production well.

Work undertaken included cutting core, logging, pressure measurements and sampling of reservoir fluids.

Nido deputy managing director Joanne Williams said these early results were "very encouraging" for the Galoc joint venture.

"The pilot hole results correspond well with the pre-development subsurface modelling which reduces reservoir risk and increases our level of confidence in the subsurface predictions," she said.

In accordance with the drilling program, the pilot hole will be plugged back to the

13-3/8 inch casing shoe and sidetracked to drill the Galoc-4 horizontal production well.

While Galoc-4 is being drilled, full petrophysical analysis combining the log data with the recovered core from the pilot hole will be used to fine-tune the placement of the Galoc-3 production well, Nido said.