“Further drilling through the claystones and limestones of the Fairfield Group has revealed additional elevated gas readings at 2295 metres, 2354 metres, 2404 metres, 2415 metres and 2470 metres measured depth, each representing an interval of several metres,” Arc said.

“A wiper trip is presently being run to condition the hole prior to running an intermediate wireline logging suite to evaluate the significance of these hydrocarbon indications.”

As of 12.30pm yesterday, the well was at 2589m, drilling ahead towards the top of the primary objective at 3222m and a total depth of 3407m.

Valentine-1 is about 20km north of Derby in north-west Western Australia's Kimberley region. The well, which spudded on August 12, is expected to take 25 days to drill.

The Valentine prospect is a large lowside fault closure that is mapped in both the EP104 and R1 permits and extends over 66 square kilometres along the Pinnacle fault system.

Following the drilling of Valentine-1, the R1-EP104 joint venture plans to drill the Stokes Bay-1 well by sidetracking from the Valentine 1 wellbore.

Stokes Bay-1 is planned as a test of the extent and reservoir development of the gas accumulation intersected by the Point Torment-1 well drilled in 1992.

It will be drilled as a deviated well with a total depth of about 2500m.

The R1-EP104 joint venture comprises Arc Energy (operator) 38.95%, Empire Oil and Gas 14.8%, Emerald Oil & Gas 12.75%, Pancontinental Oil & Gas NL 10%, Phoenix Resources 10%, First Australian Resources 8% and Indigo Oil 5.5%.