Drillsearch Energy (DLS) says it is on track to triple its full-year production after lifting its guidance significantly on the strong performance of its PEL 91 permit in the Cooper Basin.
Investors reacted well to the news. At 1020 AEDT, Drillsearch shares were 9.79% higher at $1.57, against a benchmark index lift of 0.6%. In earlier trade, Drillsearch pushed as high as $1.635.
In a statement to the Australian Securities Exchange, Drillsearch said it had increased its full-year production guidance to between three and 3.3 million barrels of oil equivalent (MMboe), from previous guidance of 2.3 to 2.5 MMboe.
"Production at the higher end of the stated guidance would be triple the 1.1 million barrels of oil equivalent produced in the previous financial year," Drillsearch said.
The group said its strong performance was being driven by the continuing better-than-anticipated performance of the PEL 91 permit in the Western Flank Oil Fairway of the Cooper Basin, and in particular the Bauer field.
An increased share of production from the Tintaburra block in the Eastern Margin following the transaction announced in mid-2013 with Santos Ltd, also contributed.
Drillsearch said the additional revenue being generated will be used to strengthen its balance sheet, with funds also reinvested in an active exploration and development program
across the portfolio.
Around 20 wells are set to be drilled in the second half of FY2014 under the current work schedule.
Drillsearch made the announcement alongside the release of its second-quarter production results.
In the three months to December 31, Drillsearch produced 914,188 barrels of oil equivalent, compared to 849,721 in the previous quarter.
In the first half, Drillsearch produced 1.76 MMboe.
Drillsearch managing director Brad Lingo described the Bauer field as a prolific performer.
"The revenue generated by our oil business continues to strengthen our cash position, as well as to underpin our broader exploration and development programs, as we pursue our strategy of increasing reserves, production and cash flow," he said.