“Wire-line logs have been run in the EFB D-24 well to 11,125 feet (3,391 metres) measured depth in 8 ½-inch hole,” Sun said.

“On the basis of wire-line log interpretation and reservoir pressures, this well has established that the primary Frio J sands target in the East Flour Bluff Gas Field has exceeded expectations.

“Six separate reservoirs have log indicated gas pay which will add to reserves. Reservoir pressure measurements have confirmed that gas reserves in three of the reservoirs are in line with those estimated by the independent expert prior to drilling.

“One reservoir (J90) has greater reserves than estimated prior to drilling. Two reservoirs which were not predicted to have reserves were found to have 7.31 metres and 3.04 metres of net gas log pay respectively at high reservoir pressure (7,199psi). These log pay zones will also add to reserves.”

After completing the sampling of reservoir fluids, sidewall cores will be obtained from all reservoirs of interest. All the wire-line data will be processed and interpreted over the next week or so to determine reserves and how the various Frio J sand reservoirs would be completed for production, according to Sun.

“Following sampling, seven-inch casing will be run and cemented to protect the potentially productive reservoir sands from formation damage by further drilling, the companny said.

“On completion drilling will resume towards the secondary Frio K sand target zones and proposed total depth of 12,226 feet (3,726 metres).”

EFB D-24 well is the first of a two well program that is evaluating the potential of the East Flour Bluff Gas Field in much the same way as the recently completed B G Webb-1 well successfully evaluated the potential of the adjacent West Flour Bluff Gas Field.

East Flour Bluff Gas Field is a down-faulted four-way dipping closure immediately to the east of the West Flour Bluff Gas Field under a shallow sea lagoon. It has a present 3P reserve of 23 billion cubic feet of recoverable gas with further upside potential of 44 BCF of recoverable gas.

The two wells in the program, the current EFB D-24 targeting deep Frio J and K sand reservoirs and the next well EFB D-10, targeting the shallow Frio Massive Sands reservoir, will be drilled from the same pad on an existing production and drilling peninsular built out into the lagoon. Both are directional wells into the structure.

The three Australian partners – Sun Resources, Victoria Petroleum and Aurora Oil & Gas – hold 12.5% in the western part of the field and have now acquired an additional 4.1666% working interest (2.9166% net revenue interest) in the East Flour Bluff Gas Field. This increases each partner's total working interest to 16.666% and net revenue interest to 11.666%.