Karoon Gas made second oil discovery offshore Brazil

5/5/2013

Karoon Gas made second oil discovery offshore Brazil

BY ROSS KELLY

SYDNEY -- Karoon Gas Australia has made its second oil discovery offshore Brazil, increasing the possibility of finding another partner to share development costs.

The company has now discovered oil in two out of three wells drilled in the Santos Basin with Colombian joint venture (JV) partner Pacific Rubiales.

Karoon said the Bilby-1 well discovered oil across a 200 m gross column, although more work needs to be done to determine the size of the find and whether it can be developed commercially.

Investors will be encouraged that the well hasn't yet reached its target depth of 4,537 m. Karoon expects further drilling to encounter a different geological structure that could also contain oil.

The Bilby-1 discovery follows the success of the Kangaroo-1 well and the failure of the subsequent Emu-1 well, which have intensified volatility in the company's shares.

Karoon, which also has discovered natural gas offshore Australia with ConocoPhillips, is planning to test the Kangaroo and Bilby discoveries with appraisal wells.

Dow Jones Newswires

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