PERTH (miningweekly.com) – The share price of oil and gas producer Beach Energy soared on Tuesday with the announcement of a gas discovery in the Victorian Otway basin at its exploration well Enterprise 1.

The company told shareholders that the well was successfully drilled to a total depth of 4 974 m measured depth and encountered the primary reservoir target of the Upper Waarre Formation, some 89 m high to prognosis at a depth of 4 594 m.

The well intersected 146 m of gas column in the Upper Waarre Formation, including 115 m of net gas pay with no gas-water contact identified.

Sampling indicates a gas composition with 10% carbon dioxide by volume, the company said.

“To have our first exploration well in the Victorian Otway programme deliver a successful result is an excellent outcome for the business,” said Beach MD and CEO Matt Kay.

“This success enhances our plans to develop more supplies for the East Coast gas market. The Enterprise result also de-risks other nearby prospects, warranting their evaluation as potential future drilling candidates.

“Our focus now moves to the upcoming offshore Victorian Otway basin drilling campaign, which is due to commence in the March 2021 quarter. The first well drilled will be the Artisan 1 exploration well, followed by development wells in the Geographe and Thylacine fields,” Kay said.

The forward plan for Enterprise 1 is to case and suspend the well as a future producer. A well test is expected to confirm well productivity and provide data for the proposed pipeline to the Otway gas plant, where detailed engineering work and a regulatory approvals process is already under way.

A volume estimate for the Enterprise discovery is expected to be completed before the release of Beach’s half-year results in February.

The company’s shares closed at A$1.44 a share on Tuesday, up from a closing price of A$1.22 a share on Monday.