Wellington-headquartered Austral yesterday afternoon said that flow testing of a 3m sandstone zone near the 1950m drilled depth had produced gas, with associated condensate, at rates of several hundred thousand cubic feet per day.

Remapping of the 3D seismic data covering the area indicated the well might have intersected the edge of a possible one square kilometre trap, within which the seismic response indicated the reservoir sandstones might thicken, to contain a viable oil or gas accumulation.

Further testing of this zone and the drilling of a second well to intersect the target reservoir at an optimal location, were under consideration, said Austral.

Testing of the shallower zone (1300m) was subject to review of development options for the gas.

But a gas collector pipeline with available capacity lay only 2.5km east of the Supplejack-1 well site, so commercial development could be considered if flow rates were enhanced and recoverable reserves estimates upgraded, according to Austral,.

On-site electricity generation was another option under review.

Austral added that production testing at another of its shallow wells, Cheal-A4 in PEP 38738, had resumed in order to bring the well back into stable production for linkage to a 1MW gas engine generation unit that was scheduled to be commissioned early next month. Electricity surplus to site needs would be sold into the local transmission system.

The PEP 38741 partners are: operator Austral Pacific Energy (30%), Tap Oil (50%) and Tag Oil (20%).