After earlier drilling confirmed a common oil water contact between the Mutineer and Pitcairn fields, the operator of the well, Santos, said yesterday it was preparing to run a seven inch liner prior to conducting a production test of the Angel formation oil reservoir.

Santos said the Sedco 703 drilling rig is drilling the well, which is located about 2km south-west of the Mutineer-1B oil discovery well in a water depth of 160m.

Santos added the finds at Mutineer, Pitcairn and Exeter have led it to predict reserves of between 50 million and 130 million barrels of oil.

Participants in the permit are Santos (33.4%), Kufpec Australia (33.4%), Nippon Oil Exploration (Dampier) 25% and Woodside (8.2%).