The Perth-based junior yesterday said the initial three wells in the El Viejito, Dos Dedos and Milagro prospects have been drilled, completed and tested, with all wells encountering and flowing hydrocarbons.

Sun Resources said El Viejito-1 and Dos Dedos-1 were gas discoveries and Milagro-1 was interpreted as a high gas content oil discovery.

It was not all smooth sailing though. The JV in March decided not to complete the El Viejito-1 well as a gas producer, after further testing resulted in water-coning of the thin gas reservoir due to its excellent vertical permeability.

“Well testing was prolonged due to the large number of potentially productive zones tested (up to four per well), unconsolidated sands flowing into the well bore, which required removal prior to conducting tests of other zones and inclement weather preventing access to the well locations,” it said.

Sun Resources said drilling is expected to start on the final three wells in the shallow drilling program in mid-May and run until July.

The campaign, which is targeting the historic Frio and Vicksburg sands at less than 2000m depth, is a pre-cursor to a higher impact program targeting 30-200 billion cubic feet of gas in the second half of this year.

Interests in the Margarita project are Empyrean Energy (44%), Victoria Petroleum and Sun Resources each with 20% and Wandoo Energy with 16%.