A preliminary interpretation of the Amulet-1 reservoir indicates that it has the potential to flow oil at rates of up to 10,000 bbl of oil per day using a horizontal well.

In addition, the Amulet-2 sidetrack well was likely to deliver significantly more oil, Tap said.

The Amulet oil field discovery is in Production License WA-8-L, in the Dampier Sub-basin of Western Australia, 34km northwest of the Legendre oil field and production facilities.

Amulet-2 was drilled on June 9 to test the extent of the Amulet structure to the southeast and investigate the possibility of additional oil reservoirs towards the basin-bounding fault, Tap said yesterday.

Encountering oil in the second sand of the Amulet-2 sidetrack well was an excellent result and it was seismically mapped to thicken up-dip to the east, according to Tap.

Moreover, there was potential for more oil-bearing sands east and up-dip towards the fault.

Tap managing director Paul Underwood said while more data was still needed, the company was upbeat.

"At this stage a commercial development looks achievable with meaningful additional upside potential should more oil volumes be established to the east,” he said.

“Tap is extremely well positioned to fund new developments without issuing new shares, with $100 million cash at bank and zero debt.”

The Amulet-2 sidetrack well confirmed the southeastern extent of the lower oil pool and intersected another oil pool in a structurally higher sand.

This sand contained a 6m oil column without a water contact and better reservoir quality than the lower sand. The size of the lower oil pool is estimated to be around 24 million bbl of oil in-place.

The Amulet-1 core hole was drilled on June 7 and a full 34m core section was recovered. Oil was dripping from this core when it was laid out on the rig floor, Underwood said.

The pre-drill planning of Amulet-1 included the alternative to core the well as opposed to flow- testing it.

"Core data, when combined with pressure testing and sample recovery, is considered to be one of the most effective methods of evaluating reservoir potential and flow characteristics for a development decision," he said.

Establishing the eastern extent of the known upper oil pool and the existence of additional sands will require another well and the joint venture is in discussions on an additional rig slot at this stage.

Amulet-1 was spudded on May 24 and drilled to its total depth and a 26m oil column on a water contact was discovered in this well. Oil samples were recovered indicating a light oil similar to that produced at the nearby Talisman oil field by Marathon in the early 1990s.

Santos did not participate in the original Amulet-1. Should a development decision be made by the JV, Santos would have to pay the original well participants 15 times the cost of Amulet-1 from first oil production revenues to buy back into the discovery. Tap’s pro-rata share of this is estimated to be around $30 million.

Amulet-2 participants are Tap (Shelfal) which holds a 20% stake, permit operator Santos (37.36%) and Kufpec Australia (42.63%).