The company yesterday said the Lombardi 3-27 appraisal well has been drilled to a total depth of 2306 feet (703m) and has encountered an oil column in the main reservoir.

Salinas said this proved a northward extension of the North San Ardo oil field.

Lombardi 3-27 is the second vertical appraisal well drilled by Salinas on the field and will now be temporarily suspended pending an oil production test.

The first well, Lombardi 1-27 was drilled in August last year and when put on production produced at initial rates of over 110 barrels of oil per day. It is now producing around 80bopd via temporary facilities.

Salinas said the Ensign 508 rig would now be moved to the Lombardi 2-27 vertical appraisal well location, also sited to define the limits of the northern extension of the oil field.

Thereafter, the company said it would begin drilling the first horizontal oil production well in the field.