Petsec Energy Ltd says there has been a sizeable gas and condensate discovery at its part-owned prospect in the Gulf of Mexico.
Shares in the oil and gas producer jumped sharply in early trade. At 1103 AEDT, Petsec was up five cents, or 30.3 per cent, at 21.5 cents.
Petsec, which owns 10 per cent of the Marathon well on the Louisiana coastline, on the Gulf of Mexico, said the well was drilled to a depth of 5,730 metres.
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Marathon was drilled by operator Phoenix Exploration Company, which made a discovery about 3.2km to the northeast that is producing 15 million cubic feet of gas and 100 barrels of condensate each day.
Production from the discovery is expected commence before the end of the year at an estimated development cost to Petsec of $US1.2 million ($A1.22 million).
"We are delighted that our strategy in the USA Gulf Coast and Gulf of Mexico, to drill for much larger targets in the deeper geologic section, has borne fruit in our second well," said chairman Terry Fern.