A new gas discovery off the coast of Myanmar will increase Woodside’s production in the area, with extended drilling revealing a 129m gross gas column.
The Shwe Yee Htun-1 exploration well was extended beyond the planned total depth of 4810m to a final depth of 5306m on 23 December, with wireline logging concluded on December 29, little over a month from spudding in on 27 November.
The announcement has spiked Woodside's share price from last year's close at $28.72 up to $29.33 and climbing as of 10:18am.
Woodside CEO Peter Coleman the new prospect provided evidence of a working petroleum system in the Rakhine Basin deep water.
“Further analysis will be undertaken to understand the full potential of the play, but this de-risks a number of leads which will now be matured,” he said.
“This discovery is an encouraging outcome for future exploration and appraisal activity in the area”.
The project is covered by an operating joint venture between Woodside Energy Myanmar and MPRL E&P (20 per cent in government liason), while Total E&P holds a 40 per cent non-operating interest.
New gas and petroleum plays may attract more attention in 2016, with Reuters reporting that oil is expected to make a massive recovery in the next year, due to expectations that US shale oil production will shrink by more than 600,000 barrels per day.
While optimism that oil will return to $80 per barrel will be welcome to producers, the recent Resources and Energy Quarterly report from the Australian Government predicts only modest growth in price from recent lows as continued but slower growth in consumption (1.2 per cent globally) outweighs relatively flat global production.