"We were drilling an appraisal," Young told PetroleumNews.net.

"It was initially unsuccessful, but it gave us a lot of data to drill the sidetrack."

Following wireline and pressure surveys, Anzon will now complete the well at the Basker-Manta-Gummy project in Bass Strait for production.

The data indicated that the sidetrack had encountered oil in five sands. Four of these sands had been seen in other wells and a new oil sand was found in the upper Intra-Latrobe. Pressure data confirmed the sands are in communication across the Basker field.

Anzon said the results supported the existence of a southeast extension to the field and the joint venture had agreed to complete the well and connect it to the Crystal Ocean floating production, storage and offtake vessel.

The well is expected to start production in mid-July at about 1500 barrels of oil per day, according to project partner Beach Petroleum. Production from the Basker project currently averages over 10,000bpd.

The sidetrack was drilled after the original Basker-6, drilled in late March, intersected its objectives about 40m low to prognosis and below the hydrocarbon-water contacts.

This disappointing result saw Anzon shares plummet on worries that the field was likely to hold less recoverable oil than previously believed, raising industry speculation that Nexus Energy, which is taking over Anzon for $A648 million, would demand a renegotiation of the merger terms.

But the company appears to have found the extension it was looking for, albeit not quite where it had expected to find it. Anzon has been buoyed by these latest drilling results, with its shares rising by 19.5c to close at $A1.40.5 on Tuesday.

The participants in the Basker-Manta Joint Venture are Anzon Australia (operator and 40%), Beach Petroleum (40%) and Itochu subsidiary CIECO (20%).

Beach is moving to complete the sale of 10% of Basker-Manta to Japanese company Sojitz.