Karoon Gas Australia has confirmed an oil pay zone at its Kangaroo-2 appraisal well in Brazil’s offshore Santos Basin.

The well is situated in exploration block S-M-1165, about 300m up-dip and 4km south of Kangaroo-1.

It is the first well in Karoon’s Santos Basin exploration and appraisal drilling campaign. The well encountered a 250m gross oil column in Paleocene and Maastrichtian aged reservoirs.

"With the first appraisal and sidetrack programme at Kangaroo-2 complete, the joint venture has taken a significant step forward in understanding the field."

Two separate extended production tests in the Kangaroo-2 appraisal wellbore flowed 31° to 38° API light oil at maximum rates of between 2,500bbl/d and 3,700bbl/d.

The Olinda Star rig will now start drilling at the Kangaroo West-1 exploration well, the second firm well in the programme.

It will identify the salt-flank prospect on the western side of Kangaroo salt structure, which is roughly 4.5km from Kangaroo-2.

Karoon Gas said because of large size and proximity to Kangaroo, a successful outcome at Kangaroo West-1 may materially add to any potential development of the Kangaroo oil field.

The exploration and appraisal drilling campaign is anticipated to continue through first half 2015.

Karoon Gas operates and has a 65% interest in the block S-M-1165. Pacific Rubiales Energy owns the remaining 35% stake.

Karoon managing director Robert Hosking said: "With the first appraisal and sidetrack programme at Kangaroo-2 complete, the joint venture has taken a significant step forward in understanding the field.

"Well data indicates a number of separate accumulations make up the field, and there is no significant gas cap as originally prognosed."