Spudded seven months ago, the Kurnia-1 well ran behind schedule and over budget due to numerous down-hole technical problems.

Cooper's South Madura PSC lies immediately to the north of Santos' Jeruk and Oyong oil and gas fields.

The region is petrolific, but geology can be complex.

Most recently, Cooper said it was having trouble testing the well and at the end of last month was deciding whether to attempt a production test or P&A the well.

“Due to the lack of formation integrity and the inability to run an adequate alternative bottomhole completion, the joint venture has been unable to perform a full production test of the Kujung reservoir and has made a decision to plug and abandon the Kurnia-1 well without any further testing activities,” the company said yesterday.

But Cooper said that 350m of gas shows encountered during drilling, as well as the production of flammable gas to surface during initial production, suggested the well had made a gas discovery.

As a result, the joint venture is not giving up on the Kurnia structure.

Cooper said it would now integrate all the well data into the existing data sets and redefine the estimated potential recoverable gas volumes, which stood at between 680 billion cubic feet (P90) and 3.8 trillion cubic feet before drilling started.

In addition, the JV plans to shoot further seismic in 2008-2009 to better define the structure.

“If there is further encouragement following the seismic, [we plan to] drill an appraisal well with the objective to test production from the Kujung carbonate formation,” the company said.

Kurnia-2 would be drilled some time between 2009 and 2010.