June 6, 2019 / 12:28 AM / 3 months ago

UPDATE 1-Santos says drilling confirms major Dorado oil and gas resource

(Adds background on Dorado field, CEO comments)

June 6 (Reuters) - Australia’s No.2 independent gas producer Santos Ltd on Thursday said the Dorado-2 appraisal well in Western Australia has confirmed a major oil and gas resource.

Santos has an 80% stake in the field after acquiring Quadrant Energy in 2018, while the remainder is owned by operator Carnarvon Petroleum.

Carnarvon in August last year said the Dorado find was estimated to hold 171 million barrels of proven and probable light oil reserves, making it the third biggest oil find off Western Australia.

Santos said drilling at Dorado-2, about 2 km (1.2 miles) from the Dorado-1 discovery encountered 85 metres of net reservoir in the primary Caley formation, while a further 32 metres of net pay was encountered in the underlying sandstones.

“This is a great result which indicates the Dorado discovery is larger than anticipated and which significantly de-risks a future development,” said Santos Managing Director and Chief Executive Officer Kevin Gallagher.

“Dorado opens a new basin with high prospectivity in permits where Santos has a high equity position and rich exploration inventory with potential to substantially grow the resource base.”

The field is located in petroleum permit WA-437-P and is about 160 km (100 miles) north of Port Hedland.

Reporting by Shanima A in Bengaluru; Editing by Richard Pullin

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