The Dorado-1 discovery offshore Australia 'has created a big exploration buzz around Perth,' according to Wood Mackenzie's Australasia Upstream Senior Analyst Daniel Toleman.

The Dorado-1 discovery offshore Australia “has created a big exploration buzz around Perth,” according to Wood Mackenzie’s Australasia Upstream Senior Analyst Daniel Toleman.

“The well was expected to find 545 billion cubic feet of gas but resulted in something much more valuable, a large buy severe service valves commercial oil find,” Toleman said in a statement sent to Rigzone.

“It has been such a long time since Western Australia had a significant oil discovery that most people have given up looking for liquids … Given the wait, Dorado-1 has created a big exploration buzz around Perth,” he added.

Toleman warned however that “many known unknowns remain”.

“Not only the size of the find, but what it actually consists of. It is still unclear whether the discovery is mainly light oil or, whether the oil is so 'light' that it is in fact a condensate,” he said.

“The good news is that, either way, very light oil is profitable and often commands a pricing premium to Brent. The bad news is that if it is a condensate with a lot of associated gas, it will require additional capital expenditure for gas handling and likely re-injection/recycling,” he added.

In a letter to shareholders published Tuesday, Carnarvon Petroleum Ltd, which jointly owns a share of Dorado-1 along with Quadrant Energy, confirmed that the well has encountered approximately 395 feet of net oil pay.

“Both the light oil recovered in the wireline testing and the indicative quality of the reservoir point to a highly valuable discovery,” Carnarvon said in the letter.