UPDATE 2.25pm: Shares in Carnarvon Petroleum have nearly tripled after the company announced a potentially huge oil discovery off the North-West coast of WA.
Drilling at the Phoenix South-1 well within the WA-435-P exploration permit north of Port Hedland encountered four discrete oil columns, with US-based permit operator Apache Energy estimating there might be as much as 300 million barrels of oil in place.
Carnarvon, which owns a 20 per cent stake in the permit, described the find as one of the most significant developments in the Australian oil and gas sector in recent times.
However the company cautioned that it was too early to quantify the recoverable volumes of oil and further technical evaluation would be required.
Carnarvon managing director Adrian Cook described the find as the most significant new oil play in the North West Shelf since the Enfield discovery opened up the Exmouth Basin almost 20 years ago.
"The implications on the rest of our acreage are still being assessed, but the potential is extraordinary," he said.
Apache’s executive vice president and chief operating officer Thomas E. Voytovich said although evaluation was at an early stage, Phoenix South-1 was an exciting result.
“The oil and reservoir quality we have seen point to a commercial discovery," he said.
"If these results are borne out by further appraisal drilling, Phoenix South may represent a new oil province for Australia.
"We look forward to working with our partners to continue evaluation of the area.”
Carnarvon is a 20 per cent joint venture partner in the Phoenix South-1 well and the broader WA-435-P exploration permit with operator Apache Energy (40 per cent), JX Nippon (20 per cent) and Finder Exploration (20 per cent).
Apache and JX Nippon have also said they are committed to drilling the Roc prospect in the neighbouring WA-437-P exploration permit as a follow up exploration well to the Phoenix South-1 well.
Carnarvon said Apache had also exercised its option to acquire a 40 per cent interest in the WA-436-P and WA-438-P permits nearby as the operator. Carnarvon retains a 30 per cent interest in both permits.
Carnarvon shares closed up 15.9 cents, or 196.3 per cent, at 24 cents after hitting an intraday peak of 28 cents.