The Perth-based company said electric logs indicated the Samstown Folse-2 well, which spudded just over a week ago, has encountered 14 feet of net pay at the top of a 240-ft sand interval.

The top of the reservoir, which is at a depth of 4620ft, is about 20ft high to the offset well, which has produced 27 million cubic feet of gas, at the downdip limit of the objective reservoir area.

This was the first of three wells planned for drilling over the next two months, initially targeting a series of shallow objectives, which if successful will provide the company with early cash flow to possibly target larger reserves in deeper reservoirs.

Completion of Samstown Folse-2 and tie-in to the pipeline system was due to be completed within the next three to four weeks.

“Similar to Padre Island the pipeline infrastructure in the project area is excellent, with ample excess capacity to deliver new gas,” Golden Gate said.

The company has farmed down from 50% to a 42.5% working interest in the well.

Following project payback, which includes all well and project entry costs, the project vendors have a 20% back-in right, which will deliver 34% working interest.

Reserves are estimated to be in excess of 1 billion feet of gas with the potential for some oil as well within the trap area to be recovered by Samstown Folse-2.

Golden Gate farmed-into the two projects, in Iberville and Ascension Parish, just over a week ago.

On Padre Island, Golden Gate said this morning it had started drilling the La Playa-2 well, designed to appraise a shallow discovery, which has been producing since 2001.

Drilling is expected to take 35 days to reach a total depth of 12,256 feet.

The La Playa-2 well is targeting the MT34 and MT35 sands in the Upper Frio section of the La Playa structure. The trap is a three-way fault closure and occurs along the same fault trend as the currently producing La Playa-1 well.

The discovery well initially started producing at 2 million cubic feet per day, but the production casing collapsed soon after completion preventing access to the MT35 and MT34 sands.

Golden Gate said the La Playa structure had the potential to contain about 40 billion cubic feet of unrisked gas reserves.