“This is an exciting find; the discovery is significant and is the first made since the government announced its new royalty regime to encourage new natural gas finds,” said Bridge executive director Kevin Johnson from Auckland today.

Radnor -1 was drilled to a depth of 4358m and encountered the primary Kapuni sand target structurally high to the previous wells, Stratford-1 and 1A, which were drilled in 1983 and 1990 respectively.

Yesterday’s production test of the interval 4290-4296m achieved an estimated stable flow rate of 4.0 million cubic feet per day on a 1/4 inch choke at a flowing tubing pressure of 3270 psi.

Johnson said further testing would be conducted shortly, depending on equipment availability, and that a production station would be built on the site with new gas and liquids pipelines installed for transportation.

Gas and oil should come online in the first three months of 2005 once a new production station is commissioned. A further well, Radnor-2, was planned to be drilled from the same pad around that time.

Although Johnson declined to discuss details, it is known Methanex is funding the drilling of Radnor-1 and 2, in PEP 38752, in return for rights to any commercial gas discovered.

The Radnor wells are testing several Kapuni targets identified in a 2003 3D seismic survey.

Commentators say the PEP 38752 licence and particularly the Radnor wells should prove very interesting, given the fact that a pipeline to the Methanex plants runs right nearby. It is thought Radnor could provide 8-12 Petajoules of gas a year to help Methanex keep one of its three methanol trains operating for several years post-2005.