US energy giant ConocoPhillips has struck gas in its initial well in a $100 million-plus drilling campaign off the Victorian coast. The result may lift hopes for an easing in the probability of shortages and price hikes later this decade. ConocoPhillips and its two partners, including Korea National Oil Corporation and ASX-listed junior explorer 3D Energi, found two deposits of gas at different depths in the Essington-1 well, 3D Energi said in a statement. 3D Energi is an Australian energy company focused on offshore gas exploration. The company is listed on the ASX.
The Essington-1 well is the first of two to be drilled in a permit in the Otway Basin, 55 kilometres off the coast from Port Campbell, targeting domestic gas in the stretched east coast market. It was aiming to find about 260 billion cubic feet of resources in two separate reservoirs, and the early results of the drilling came in largely in line with expectations, said 3D Energi executive chairman Noel Newell, who described them as “very encouraging”.
“The early results from Essington-1 are very encouraging, with clear indications of gas-bearing sandstones in both the primary and secondary targets,” Newell said. The campaign, which is opposed by anti-fossil fuel activists, is being closely watched by energy retailers and manufacturers. They have become increasingly anxious about warnings from regulators about the risk of winter-day shortages in gas in Victoria later this decade.
Following the announcement, shares in 3D Energi were up 47.8 per cent.
