Oil Search has reported that while it has discovered only ‘modest’ quantities of natural gas during a new exploration campaign in the Gulf of Papua, it will continue drilling in the area.

Oil Search’s Peter Botten

In the company’s quarterly report, Managing Director Peter Botten said its Flinders and Hagana wells in the Gulf of Papua showed good quality reservoir properties, indicating gas in the area.

“Although the volumes at Flinders and Hagana are likely to be relatively modest, the company has been sufficiently encouraged to take up a further well option and will drill the Kidukidu prospect once Hagana-1 is completed,” he said.

The company is on track to apply to the PNG Government for an oil field development licence in August this year, after another oil find on the Mananda Ridge in the Highlands.

‘The potential oil in place on this feature could be as high as 100 million barrels,’ he said.

Botten also said he was ’watching’ talks between InterOil and ExxonMobil to supply additional gas from the onshore Elk and Antelope gasfields to the Port Moresby LNG plant. Should this happen, he said, it was likely that Oil Search could participate in this expansion.

He also said the new PNG LNG project—in which Oil Search has a 29% stake—was 90% complete and on track for its first sales next year.

The company will release its first half results on Tuesday 20 August.