But it hasn’t stopped the Santos Ltd (ASX: STO) share price from pushing higher. In morning trade the Santos share price has risen over 2% to $6.79.
Why is the Santos share price on the rise today?
Investors have been buying the company’s shares this morning after it provided an update on the Dorado-2 appraisal well in the Bedout Basin off the shore of Western Australia.
According to the release, the well was drilled down-dip approximately two kilometres from the Dorado-1 discovery and the results appear to have confirmed a major oil and gas resource.
Dorado-2 is located in petroleum permit WA-437-P, which is in Commonwealth waters approximately 160 kilometres north of Port Hedland and two kilometres away from the Dorado-1 discovery made in July last year.
It is co-owned by Santos (80%) and Carnarvon Petroleum Limited (ASX: CVN) (20%). Unsurprisingly, the Carnarvon share price is up almost 13% on the news.
The energy producer’s managing director and chief executive officer, Kevin Gallagher, was very pleased with the result and surprised by its size.
He said: “This is a great result which indicates the Dorado discovery is larger than anticipated and which significantly de-risks a future development.The value of the discovery is greatly enhanced by the high quality reservoirs and fluids and the shallow-water setting, which should facilitate a cost-competitive development.”
Mr Gallagher added: “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. Acquisition of a major new seismic survey, the Keraudren 3D survey, is in progress to mature additional exploration opportunities for drilling along this significant hydrocarbon resource play.”
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.