Drillsearch Energy Limited (ASX:DLS) shares soared 12 per cent after the junior oil and gas company announced it has signed a Gas Sale Agreement with the South Australian Cooper Basin JV.
The agreement allows the immediate commercialisation of existing Middleton and Brownlow wet gas discoveries and as a result further wet gas exploration drilling will commence immediately.
Managing Director, Brad Lingo said…
“This project brings the Company one step closer to becoming a significant gas supplier into the Eastern Australian gas markets…. Delivering this initial pilot project gives us confidence for future investment in exploration and development of our wet gas play areas (PEL 106A, PEL 106B and PELA 513) to establish Reserves for future sale into domestic and or export gas markets.”
Drillsearch recently told investors their very clear objective for the 2012 financial year was to increase reserves, increase production and increase cash flow.
In recent years, the company has had an excellent run with the drill bit, as shown by this slide from a recent presentation, saying…
“Over the last 3 years we have also drilled 14 development production wells all drilled on 3D seismic and achieved a 100% success rate with each of these well either in production or awaiting commencement of production early next year.”
Drillsearch no longer flies under the radar. With a share price of 75 cents the company has a market capitalisation of $230 million.
As an emerging producer, they are the type of company that might fly onto our Foolish radar. We’ll drill a little deeper.