Wellington-based operator Indo-Pacific Energy today said that during the past 24 hours the well had flowed at a rate of up to 4.5 million cubic feet of gas per day through a 32/64 inch choke, at a surface flowing pressure of 750 psi.

As the test progressed, an increasing amount of oil in the gas stream was indicated as well as a gradual decline in gas rate due to the heavier well stream.

"We are very pleased with these initial flow rates, which are more than twice those recorded when the well was originally tested. This is due to our improved completion technology as well as the additional gas pay sands," said company chief executive Dave Bennett.

"The extended production test in a few weeks will allow us to make estimates of gas reserves and long term oil and gas production rates, and hence assess the best means of developing the reserve."

However, Dave Bennett said oil rates could not yet be calculated as test separation equipment was not expected to be available for a few weeks.

The latest test interval included the shallow oil and gas sands originally flow tested at Cheal-1 in the mid 90's, plus an additional gas-bearing sandstone about 15m higher up the well.

Testing of Cheal-2 and the drilling of a Cheal-3 well, higher on the structure, were under consideration. The Cheal-1 and 2 wells are situated on the same well site, less than 7km across easy terrain from pipeline tie-in points.

Bennett added that following verification of commercially viable reserves, it was expected pipeline connection should be readily achieved, as well as the signing of the necessary gas sales contract to ensure commercial success in New Zealand's rapidly strengthening gas market. This could see the field brought into production from early next year.