Following the purchase of an additional 9% stake in exploration permits for WA-314-P and WA-315-P in the Browse basin at the beginning of this month, ConocoPhillips (COP) experienced success on its latest well (Poseidon-2) in the drilling program with partner Karoon Gas.

Poseidon-2 is an appraisal well that has been testing for the presence of gas. The drilling of this well followed the successful drilling of the Poseidon-1 well earlier this year.

Poseidon-2 struck a 20 meter gas column in the Montara formation, which sits above the Plover formation. The well has penetrated the same three sand intervals as in the successful Poseidon-1 well.

Poseidon-2 is the third well of the joint venture’s drilling campaign. The second well, Kontiki-1, didn’t find much and was written off as a duster. Two more exploration wells, Lion-1 and Kronos-1, will follow Poseidon-2. The venture has an option to drill four more wells.

ConocoPhillips owns a 60% stake in the venture, while partner Karoon Gas owns the remaining 40% interest.

Conoco has added a number of high-impact projects in the LNG area and achieved exploration successes in offshore China, Vietnam, Gulf of Mexico and offshore Australia. A large gas pay at Poseidon-2 would provide further evidence that ConocoPhillips is sitting on a resource offshore Western Australia, which can support a multibillion dollar LNG (liquefied natural gas) development.

Zacks Investment Research

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