The company said the well was currently drilling ahead at a depth of 7863 feet (2396m) in 9.875-inch hole with the Moncla 11 drilling rig.

During the past week, Horizon said the well has penetrated several highly permeable sands, which required the operator, US-based CLK Energy, to take measures to cure lost circulation.

The well has now also penetrated the shallower target horizons and experienced strongly elevated gas readings and cuttings fluorescence over an interval from 7700 to 7773 feet. Horizon said the full significance of these observations would be determined after electric logs are run at the end of this hole section at about 8200 feet.

The company expects drilling will take a further 12 days to reach total depth.

The well is the first of a three-well exploitation program targeting zones up-dip of existing oil production around the Bayou Choctaw salt dome.

It has reserves potential of 1.8 million barrels of oil in several zones that are productive down-dip of the well’s location. It was deviated to penetrate each objective zone in an optimal position to a planned true vertical depth of 2775m.

The well is located in the Victory Financial Lease. Horizon Oil has a 14% interest in the Australian Mineral Interests-1 well and will have a 19.8% interest in the following two wells. Icon has a 19% stake in the lease. The remaining equity is held by CLK Energy.

Another Australian joint venture, comprising Perth-headquartered juniors Amadeus Energy and First Australian Resources, as well as private US interests, recently drilled the Schwing A-1 well in the Bayou Choctaw area but it was a dry hole.