Sun Resources said yesterday that the Milagro-1 well had reached total depth and wireline logging operations began on February 20.

Wireline log operations, including sidewall cores were conducted over a period of 20 hours and initial interpretation indicates there is potential oil pay of 4.3m in the target sands.

Perth-based Sun Resources said preparations will begin immediately for the well to be cased with 4-½ inch production liner using the current rig in anticipation for completion and production testing.

Meanwhile, it said El Viejito-1, the first well in the south Texas-based program, is waiting on testing equipment to arrive at the well site.

The six-well program is targeting shallow gas prospects – less than a depth of 2000m – on the project, with the potential to contain 8-10 billion cubic feet of gas.

The shallow prospects to be drilled are analogues of historic prolific Frio and Vicksburg sands production in the project area at less than 2000m depth.

The program is also a precursor to the beginning of a drilling program expected to start in the middle of this year on more substantial, individual deep reservoirs that have 30-200Bcf of gas potential.

Interests in the Margarita project are Empyrean Energy (44%), Victoria Petroleum and Sun Resources each with 20%, and Wandoo Energy with 16%.