Santos Discovers Oil at Watson West-1 Exploration Well

Drillsearch announced that the Watson West-1 exploration well has encountered sufficient pay to be cased and suspended as a future oil producer in the Basal Birkhead Formation.

The Naccowlah Block is a joint venture of Santos Ltd (55%) and operator, Beach Energy (38.5%), DLS (2%), Inland Oil (2%) and Energy World Corporation (2%) and is one of Drillsearch’s Mature Oil production assets.

Watson West-1 is located west of the existing Watson and Watson South Oil Fields in the Naccowlah Block in the South West Queensland Cooper Basin. Watson West-1 is a near field exploration well targeting a four-way dip closure adjacent to the Watson South Oil Field. The Watson South Oil Field to date has produced 2.3 million barrels of oil from the Basal Birkhead.

Watson West-1 has encountered approximately 6 to 8 feet of oil pay in the basal intervals of the Basal Birkhead Formation within a gross oil column of 24 feet based on preliminary interpretation.

Initial post-drill estimates indicate an Oil In Place in the range of 300,000 to 400,000 barrels.

Watson West-1 is the first of five exploration and development wells planned in the Naccowlah Block during 2010. The company will provide further updates on the progress of the activities in the Naccowlah Block and the recoverable oil estimates as these become available from the operator.