The Perth-based junior told the market yesterday that the Cobra appraisal well would be operated by Encore, its partner in the block.

The well is designed to appraise the discovery well, drilled by Amoco in 1984, which was flow-tested at 2.7 million cubic feet per day from the Rotliegend sandstone.

Norwest’s share of the cost to drill this well is expected to be $3 million or 6.5% to the cap, after reaching farm-out agreements with Challenger Minerals, Tata Petrodyne and Bharat Petroleum.

Post farm-out, the company will retain a 22.5% stake in block 48/2c.

Chief executive Joe Salomon reiterated that the ‘exploration risk’ had been removed from the Cobra project.

“We are expecting that today’s drilling techniques will produce a higher flow rate than that seen in the old well,” he said.

“Given success in this appraisal well, the field development would be through horizontal drilling.”

Salomon said the Cobra discovery well discovered a 60-metre gas column within the main productive sandstones of the area.

The appraisal well is located 100 metres updip of the discovery well close to the crest of the south-easternmost culmination of a composite structure.

“We expect the base case, ie gas in the southeastern Cobra culmination to be of an economic size, and there is significant upside potential in the case that the greater structure also is gas filled,” Salomon said.

The block is surrounded by producing fields and existing available infrastructure, potentially offering an early and low-cost development.