Proactive Investor's  Instablog

Key Petroleum (ASX: KEY) has completed all coring and logging of the Goldwyer Formation and encountered oil shows in the Willara Formation at its Cyrene-1 well in the onshore Canning Basin, Western Australia.

Coring was consistent with oil shows across the lower Goldwyer with results indicating that the Formation is a good source rock for generating oil in this part of the Canning.

Key is also preparing to run wireline logs and conduct a drill stem test after observing oil shows with background gas of between 5 and 10 units throughout the Willara sequence.

The test will establish the true formation fluid in the Willara and if any hydrocarbons are present, whether they can flow at economic rates.

Key had previously noted the oil shows in the Goldwyer upgraded the prospectivity of EP 438 and provided a lot of encouragement for follow up drilling.

Any discoveries can also be quickly commercialised due to its close proximity to the Great Northern Highway and other proximity to other developments such as Buru Energy's (ASX: BRU) Ungani oil field.

Key holds a 20% stake in EP 438 and is operating Cyrene-1 on behalf of the joint venture.

Buru and partner Mitsubishi Corporation are farming into EP 438 by contributing A$3 million to seismic and exploration drilling within the permit to increase their stake to 75% from 5%.

The remaining 5% is held by Indigo Oil.

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