PERTH (miningweekly.com) – The share price of ASX-listed oil and gas company AWE increased by nearly 15% on Thursday after the company announced a major onshore gas discovery in Western Australia.

The company said that a gross contingent resource of between 65-billion cubic feet and 1 170-billion cubic feet had been discovered at the Waitsia joint venture, which is 50% held by fellow-listed Origin Energy.

At best estimate, the project was expected to host about 290-billion cubic feet of resource.

AWE noted that the presence of a significant quantity of potentially moveable hydrocarbons was indicated by strong gas shows, petrophysical analysis and pressure data.

“This is a fantastic result for AWE, the local Mid West community and for the people of Western Australia. The discovery in the deeper Kingia and High Cliffs sandstones has opened up an exciting new and substantial gas play in the north Perth basin,” said AWE MD Bruce Clement.

He noted that the Senecio/Waitsia discovery could represent the largest onshore conventional gas discovery in the state since the 1960s.

“Initial evaluation of the Senecio and Waitsia fields has identified 360-billion cubic feet of gross contingent resources, which could be brought into early production, using existing gas plant and pipeline infrastructure just 7 km from the Senecio-3 location,” said Clement.

He further pointed out that there was also substantial upside to the initial estimated gas volume, which could be realised by the successful appraisal of the Waitsia discovery, and exploitation of the unconventional gas potential identified in the Carynginia shale, and the Irwin River coal measures.

“We are now focusing on flow testing of Senecio-3 to establish commercial viability and the potential early, low-cost development of the Senecio and Waitsia fields. If successful, this could deliver significant additional gas into the Western Australia domestic market and provide substantial value to AWE shareholders,” Clement added.

AWE’s shares were trading at a high of A$1.96 a share on Thursday, up from an opening price of A$1.80 a share and the previous day’s closing price of A$1.68 a share.