Apache yesterday said Julimar-1, which was drilled in 187m of water to a total depth of about 3716m, discovered 40m of net pay in the Mungaroo on-trend with other significant fields.

Julimar is just north of the West Tryal Rocks field and southwest of the Pluto field – both multi-trillion cubic feet discoveries in analogous reservoirs.

Julimar is also northeast of Gorgon, which is part of a potential 40 trillion cubic feet (Tcf) gas accumulation in the deeper Mungaroo.

Apache said it flow tested two of the four gas-bearing fluvial channel sands encountered and these zones had flowed a combined 85 million cubic feet per day (MMcfd) of gas.

The J-10 sand, perforated between 3611m and 3616m, achieved stable flow rates of 41MMcfd and 400 barrels of condensate per day.

The J-1 sand, perforated between 3174m and 3182m, flowed at stable rates of 44MMcfd and 435bbl of condensate per day.

The flow rates of both zones were limited by the size of the surface facilities, Apache said.

“Julimar is the first discovery from a slate of high quality exploration prospects we intend to drill in our core growth regions this year,” president Steven Farris said.

“The initial results are extremely encouraging and we believe the ultimate recoverable reserves in this channel complex could exceed 1Ttcf.

“Appraisal drilling will be required to confirm the size of the discovery, and we are planning a well for later in the year that will not only appraise Julimar-1 but also test some of the deeper prospective channels.”

Farris said the success of the Julimar well increased the probability of success on additional prospects identified on the WA356P permit, which Apache holds a 65% interest in, using similar geological methods, including the Brunello prospect, north of Julimar.

He added that Apache’s latest discovery came at a time when Australian gas prices were being pushed higher as a result of rising demand from Western Australia’s domestic markets and Pacific Rim liquefied natural gas markets.

Farris said Apache also planned to drill another gas prospect, Rosella, southwest of its John Brookes field, its largest Australian gas field, later this year.

The John Brookes field currently produces 250MMcfd of gas from three wells (138MMcfd net to Apache) with ultimate reserves projected to be in excess of 1Tcf.

Once the Sedco 703 rig has finished testing Julimar, it will move to the Exmouth sub-basin, southwest of Apache’s operated Varanus Island complex, where Apache and partner BHP Billiton plan to drill six exploration prospects during the year.

Farris said Apache’s Exmouth basin discoveries – Theo, Ravensworth, Crosby, Stickle and Harrison – had resulted in the Apache-operated Van Gogh and BHP Billiton-operated Pyrenees developments.

These two projects, scheduled to come online in late 2008 and early 2009, were expected to add net production of 40,000 barrels of oil per day when fully developed, equal to about 15% of Apache’s current worldwide liquids production.

“Apache has now matured a number of higher risk, higher reward prospects across the 27 million acres we have assembled over the last several years in our core growth regions of Australia, Canada and Egypt … each of our core growth areas will have a large component of exploration activity this year,” Farris said.

Australia accounted for about 8.6% of Apache’s global production last year and about 8.8% of its proved reserves.