UPDATE 1.25pm: Santos says it has made a significant gas discovery at its Crown-1 exploration well in the Browse Basin off the Kimberley coast.
The well is in 440 metres of water in the WA-274-P exploration permit about 500km north of Broome and about 60km west of Inpex's Ichthys field.
The company said wireline logging had to date confirmed 61 metres of net gas pay in the Jurassic-aged Montara, Plover and Malita reservoirs between 4873 and 4998 metres.
"Pressure data has been acquired from multiple points indicating that gas would be expected to flow at a high rate," Santos said.
"Multiple condensate-bearing gas samples have been recovered to surface."
Santos said drilling would now progress on the Crown-1 well to a proposed total depth of 5200 metres.
Santos' Head of Exploration Bill Ovenden described Crown-1 as an important gas discovery for the company.
"The Crown discovery is well positioned, in close proximity to existing and proposed LNG projects in the Browse basin and other material exploration prospects," he said.
Santos is the operator of WA-274-P and holds a 30 per cent stake with Chevron holding 50 per cent and Inpex (20 per cent).
Santos also said it had executed agreements to take a 30 per cent interest in the adjoining exploration permit, WA-408-P, operated by Total (50 per cent), subject to customary conditions. Murphy Oil Corporation has a 20 per cent interest in the permit.
The joint venture has committed to an initial drilling programme in the permit, including Dufresne-1 and Bassett West-1. These wells are expected to immediately follow the Crown-1 program.
Santos VP WA and Northern Territory John Anderson said the agreement with Total and Murphy substantially increased the company's exposure to exploration upside in the Browse Basin.
"The strong partnerships and the material prospectivity in this key offshore gas province positions Santos very well for the future. We look forward to the WA-408-P drilling program," Mr Anderson said.
Santos shares closed up 42 cents, or 3.86 per cent, at $11.30.