Attempts to test the shallower Montara Formation reservoir were inconclusive, leading Karoon to say it was unlikely that communication to the reservoir was established during the perforation process, though data from the well suggested there was moveable gas in the reservoir.

Meanwhile, testing of the Plover B Formation resulted in a flow of 850,000 cubic feet of gas per day, due in part to completion brine in the well severely restricting gas flow to surface.

Karoon added that based on the low permeability in the reservoir, higher flow rates were possible.

The company considers the Plover A and C sand intervals to have better quality overall than the B sand.

Despite the results, Karoon said the well "met the objective of testing the extent and quality of reservoirs down dip from the Poseidon 1 discovery in a thickened Plover Formation", and noted that these would not impact its pre-drill estimate that Poseidon could hold up to 7 trillion cubic feet of gas.

The partners are now preparing to plug and abandon the Poseidon-2 well as planned and move the Transocean Legend semisubmersible to drill the Kronos-1 well, which is aimed at confirming commercial production rates from future development wells located on the crest of the greater Poseidon structure.

Karoon said this decision was due in part to the lack of suitable equipment to establish communication at the Montara Formation.

ConocoPhillips holds 60% of WA-398-P while Karoon holds 40%.

Shares in Karoon Gas, which resumed trading this morning, were down 32% from a close of $6.66 on Monday to $4.51.