UPDATE 2.30pm: Shares in Carnarvon Petroleum were higher after the company reported gas and associated liquid hydrocarbons while drilling at its jointly owned Phoenix South-1 well off the North West coast.
Operator and majority owner Apache Energy had drilled to a depth of 4321 metres before a drill bit failure.
Carnarvon managing director Adrian Cook said the observations of gas and liquid hydrocarbons were encouraging however he cautioned that they were untested, unquantified and preliminary.
"This outcome has provided Apache with the encouragement to continue drilling, justifying the additional cost and time delay associated with drilling a second side-track well bore," he said.
"At this stage it is premature to make any conclusions around the quality of the observed gas or liquid hydrocarbons, their volumes or whether they will flow and accordingly whether they could result in any commercial development.
"Further drilling and evaluation is required before we are able to be more definitive and I will update the market as soon as we have the necessary information to hand."
Carnarvon owns a 20 per cent stake in the Phoenix project while Apache holds 40 per cent. JX Nippon and Finder Exploration each hold a 20 per cent share.
Carnarvon Petroleum shares were up half a cent, or 6.1 per cent, to 8.7 cents at the close of trade.