While MEO has long-touted plans for a methanol facility, its primary hopes were pinned on finding a gas resource suitable for a liquefied natural gas plant.

Unlike LNG, methanol processing favours natural gas with a high CO2 content.

As planned, MEO said yesterday it had plugged and abandoned Blackwood-1 and has now released the West Atlas jack-up rig.

Spudded at the beginning of February, the Blackwood-1 well in NT/P68 was reported last week as having encountered a 126-metre hydrocarbon column in the Flamingo and Plover sands.

However, initial gas analysis this week confirmed the gas was relatively dry and contained CO2 levels in the 25-30% range, which MEO said was "very similar" to Evans Shoal gas, and therefore suitable for methanol production.

MEO has formally declared it a discovery well, after running a series of logging runs, including the recovery of hydrocarbons to surface by MDT (modular dynamics testing) down-hole sampling.

Additionally, a number of core samples through the column have been obtained.

As of yesterday, the gas, core samples and log data are being analysed by specialist petrophysical contractors.

MEO drilled Blackwood-1 on a sole-risk basis.