Operator Texas Crude Energy has so far drilled the Texas Gulf Coast well to a measured depth of 12,720 feet (3878m) and was yesterday cementing casing.

In the last week, Aurora said the well has been steered from vertical to reach a horizontal attitude just inside the target Austin Chalk upper zone, believed to correlate with the producing zone in the Sugarkane discovery well.

Background gas increased from around 40 units to about 100 units on entering the Austin Chalk target zone, the company said.

“The commercial significance of the elevated gas background is not known but is regarded as encouraging,” Aurora said.

As planned, casing is being run before the final 4850ft (1273m) of the well is drilled entirely within the near horizontal target Austin Chalk upper zone, in order to evaluate the zone and its production potential.

Elsewhere on the Sugarloaf project, the operator has restarted fraccing and testing the earlier Sugarloaf-1 well in the deepest of three zones of gas shows and pay in the Austin Chalk Formation.