"Logs indicate it's either liquids-rich gas or a very volatile oil," Australian Worldwide Exploration managing director Bruce Phillips told journalists on the sidelines of the APPEA 2007 Conference.

"If it's gas the dice have probably come up snake eyes. But if it's oil we have a commercial development."

The well, Frankland-1 in permit WA-286-P,is the first in a three-well campaign being conducted near the Cliff Head oil development. Phillips said the shows at Frankland raised the prospectivity of the other targets.

Yesterday, the operator, Roc Oil, reported that Frankland-1 had encountered a 35m gas interval as well as high background gas readings with possible further hydrocarbon saturation in thin sands. An additional 10m zone of potential interest was encountered in the up-hole section of the well.

Frankland-1 is the first of a planned three-well exploration drilling program, which will also include Dunsborough-1 in WA-286-P and Perseverance-1 in WA-325-P.

Roc said as of yesterday, Frankland-1 was drilling ahead at 2090m and since April 10 had drilled to 1720m where 244mm casing was set prior to drilling on to the present depth.

Based on preliminary drill data, the top of the reservoir objective appears to have been encountered some 50m high to prognosis at about 1983m below the rotary table (MBRT).

The company said the joint venture will now drill to the proposed total depth of 2210 MBRT and run a full suite of electrical logs to better evaluate the nature and significance of the hydrocarbon indications encountered by the well.

Participating interests in WA-286-P are Roc (37.5%), AWE Oil (27.5%), Wandoo Petroleum (24%), Arc (6%) and CIECO Exploration and Production (5%).

Interests in WA-325-P are Roc (37.5%), Apache Northwest (37.5%), Arc (20%) and Wandoo Petroleum (5%).