According to the company, this discovery opens up a new exploration play in the East China Sea for Primeline. The discovery also has significant implications for the development of the LS 36-1 gas field which Primeline and CNOOC are jointly developing.

Electric logging at the level of Target Zone 3 had indicated over 20mt aggregate of potential hydrocarbon pay in two zones. These zones were further investigated by the Reservoir Characterisation Instrument (RCI – MDT) and side wall coring and results suggested the presence of hydrocarbons in low permeability sandstones.

On May 16, 2010, Primeline commenced a DST program to test these zones under a turnkey arrangement with contractor China Oilfield Services (COSL).

DST1 was conducted over the depth range 2836-2852mt measured depth (MD). This was conducted conventionally using diesel in the wellbore. There was no flow of hydrocarbons to surface.

DST2 was conducted over the depth range 2794-2802m MD. In contrast to DST1, nitrogen was used in the wellbore to optimize the pressure drawdown and gas flowed naturally to the surface and was flared continuously and steadily for over seven hours.

A second flow period was attempted after an 18 hour shut-in but was unsuccessful because the test valve was blocked by formation sand. There was then a second shut-in period of 15 hours. Data from the downhole pressure gauges showed that the two pressure build-ups during the shut-in periods were consistent.

The surface gas flow during the first flow period was at a low pressure which steadily rose over the 7 hour flow period but did not reach the pressure necessary to operate the separator or the flow meters. The flow potential of the well was thus not measured.

The test program ended on May 29 and the COSL rig will be released in the next few days after the completion of current end-of-well operations, the company said.

According to the company, this discovery is significant in that it confirms hydrocarbons have migrated to and are trapped in the channel systems in the west flank of the West Lishui Basin, the majority of which is inside Block 25/34.