“Gas flow has been recorded at rates in excess of 2 million cubic feet of gas per day and condensate, produced in association with the gas flow, has been recorded at rates up to 100 barrels per million cubic feet of gas produced,” said Adelaide, which holds 100% in the South Australian Otway Basin well.

“These recorded flow rates are very encouraging, particularly as no formation water was produced during testing.”

But hole conditions prevented the production log testing from gaining specific information about individual sand reservoirs intersected by the well below 2675m and the flow rate given is the collective rate for all intervals beneath this level.

Reservoirs are known to exist below this level based on interpretation of electric logs recorded immediately after drilling was completed, according to Adelaide Energy.

“A 27-metre-thick sand intersected immediately beneath the 7-inch casing shoe appeared to contribute only minimal amounts to the recorded flow-rate,” the company said.

“This is despite the sand computing to have approximately 11 metres of pay based on log interpretation. It is possible that this sand could have better reservoir properties in other areas of the 7-square kilometre structure.”

This sand presents a significant primary target for future drilling, particularly as the demonstrated gas and condensate flows produced by Jacaranda Ridge 2 are emanating from sands thinner than this, Adelaide said.

In addition, a 5m-thick oil-bearing reservoir penetrated in Jacaranda Ridge-1, which was drilled in 1999 and produced an oil flow at a rate of up to 408 barrels per day, was not reached in Jacaranda Ridge 2. The company aims to investigate this at a later date.

Negotiations are underway for the sale of Jacaranda Ridge-2 gas and condensate.

Meanwhile, Adelaide Energy has also announced it has been granted the PEL 218 exploration lease in the Cooper-Eromanga Basin, South Australia. The five-year grant is effective from November 1.

“The block covers an area of approximately 1600 square kilometres, encompasses most of the Nappamerri Trough and is centred around the South Australian town of Innamincka,” Adelaide said.

“The block is considered by the company to be highly prospective for Jurassic oil and Permian gas accumulations.”