Austral this morning said the step-out Cheal-A7 well was a "significant" discovery that might increase total oil production from Cheal by almost 60% from the current 420 barrels per day to about 670bpd.
The well intercepted a total of about 7m of oil-bearing sands - in the MM3 reservoir at about 1695m and the MM2 reservoir at 1730m - before reaching its total depth of 1848m late last week.
Cheal-A7 encountered both of the anticipated oil-saturated Miocene-aged Mt Messenger sandstone reservoirs at the expected depths, but slightly thicker than prognosed from last year's 3D seismic survey.
Austral chief executive Thom Jewell said Cheal-A7 could be producing oil by August, which would take the number of operating wells at the Cheal field to six.
Austral was now preparing a temporary tie-back into the Cheal production station to production test Cheal-A7.
"We are pleased with the results of the A7 well, both for its ability to significantly increase the field production rates in the immediate term and, as importantly, for its confirmation of the seismic model that we use to improve the probability of drilling successful wells and expanding this play trend," Jewell added.
TAG chief executive Garth Johnson said his company was looking forward to increased production from Cheal at a time of record high oil prices (of above $US147 per barrel).
He added log results had indicated good quality reservoir sands over both the MM2 and MM3 zones, and that the new data would help define further exploration opportunities in the greater Cheal trend.
Last Monday Austral said wireline logging of the Cheal-A6 well and its subsequent sidetrack Cheal-A6ST, both of which had targeted a new oil pool near the Cheal production station, indicated the productive sands were only about 2m thick, thinner than prognosed and sub-economic to complete and produce.
The Ensign Rig 19 then started drilling Cheal-A7 from the same surface location but deviated into another part of the main producing pool.
The current appraisal program is designed to test the reserve potential in the Cheal field area, with drilling targets chosen, based on the regional 3D seismic data set, to have potential to add both reserves and increased production from sands lying above the regional oil water contact.
Austral operates Cheal and holds a 69.5% interest, while Canadian listed junior TAG holds 30.5%.
Jewell added that Austral and TAG would begin work on the second well at the nearby Kahili gas-condensate field (PMP 38153) - which is presently shut-in - during the second half of this year.
