Carnarvon said the well penetrated the top of the target volcanic at 1501 metres, then encountered lost circulation at 1552m and 1585m at rates of 20 and 227 barrels per hour, respectively.

A total of 4900 barrels of drilling fluid was lost into the target formation while drilling and logging.

Live oil was observed at the surface while drilling at 1503, 1556, 1565 and 1585m.

Testing of these shows is due for completion within the next 12 days.

Pan Orient is operator and holds 60% of the project, while Carnarvon has 40%.