Australian oil and gas producer Santos Ltd. (STO.AX: Quote, Profile, Research) said on Friday an appraisal well at its Jeruk oil discovery offshore east Java in Indonesia has flowed oil at a stabilised rate of 2,750 barrels a day.
The result comes after initial tests on the Jeruk-3 well were suspended in May because of technical problems.
An oil and gas analyst, who declined to be named, said the result was encouraging but that a more comprehensive assessment of the reservoir interval would be needed to draw any definitive conclusions on the well.
Jeruk is seen as key to Santos’ growth as it seeks to replace depleting reserves from ageing fields and grow its production profile beyond 2007.
Drilling began at Jeruk-3 in January following ambiguous results and indications of complex geology from Jeruk One and Two in 2004.
Santos will now press ahead with drilling as it seeks to locate the oil and water contact and better evaluate the reservoir interval.
Santos shares jumped 1.8 percent, outrunning a 0.8 percent rise for the S&P/ASX 200 energy sub-index <.AXEJ>.
Â© Reuters 2006. All Rights Reserved.