Karoon Makes Oil Discovery Offshore Brazil. Shares Jump 22 Pct

Karoon Gas Australia Ltd has made a second oil discovery in its three well Santos Basin exploration drilling campaign. The announcement of the oil discovery at its Bilby-1 well sent Karoon shares up 22%

In its press release, Karron says that oil is contained within an interbedded sand and shale interval of Maastrichtian age and has been confirmed from sampling of over a 200 metre gross section so far.

The discovery has been confirmed by wireline petrophysical, MDT pressure data, fluid sampling and mudlog analysis. Multiple fluid samples have been taken and will be fully analysed when recovered to surface. The well is positioned about 150 metres down dip from the trap crest, allowing for additional prospectivity higher in the structure.

Wireline testing of the discovery is continuing with full results expected over the coming week. The well will then drill ahead as planned, to 4573mRT where Karoon hopes to encounter hydrocarbon bearing reservoirs in the Santonian aged interval.

As at 6:00 hours BRST on 6th of May 2013, Bilby-1 was at a depth of 3845mRT.

Karoon Gas executive chairman, Robert Hosking, said, “Oil found in Bilby-1 adds to the Kangaroo-1 oil discovery earlier in 2013 and continues Karoon’s successful track record in the Santos Basin blocks.”

“Three out of four wells drilled by Karoon this year have been successful. Karoon Gas, in joint venture with its major international partners is in a strong position to create very significant value for shareholders as these oil and gas discoveries are further defined and potentially developed.” 

The Bilby-1 well is located within Block S-M-1166. Karoon said that the Bilby-1 evaluation program is expected to continue through May with results being released as they become available.