News that oil prices have crashed into a bear market have weighed on the shares of energy producers such as Oil Search Limited (ASX: OSH) and Woodside Petroleum Limited (ASX: WPL) today.
But it hasn't stopped the Santos Ltd (ASX: STO) share price from pushing higher. In morning trade the Santos share price has risen over 2% to $6.79.
Why is the Santos share price on the rise today?
Investors have been buying the company's shares this morning after it provided an update on the Dorado-2 appraisal well in the Bedout Basin off the shore of Western Australia.
According to the release, the well was drilled down-dip approximately two kilometres from the Dorado-1 discovery and the results appear to have confirmed a major oil and gas resource.
Dorado-2 is located in petroleum permit WA-437-P, which is in Commonwealth waters approximately 160 kilometres north of Port Hedland and two kilometres away from the Dorado-1 discovery made in July last year.
It is co-owned by Santos (80%) and Carnarvon Petroleum Limited (ASX: CVN) (20%). Unsurprisingly, the Carnarvon share price is up almost 13% on the news.
The energy producer's managing director and chief executive officer, Kevin Gallagher, was very pleased with the result and surprised by its size.
He said: "This is a great result which indicates the Dorado discovery is larger than anticipated and which significantly de-risks a future development.The value of the discovery is greatly enhanced by the high quality reservoirs and fluids and the shallow-water setting, which should facilitate a cost-competitive development."
Mr Gallagher added: "Dorado opens a new basin with high prospectivity in permits where Santos has a high equity position and rich exploration inventory with potential to substantially grow the resource base. Acquisition of a major new seismic survey, the Keraudren 3D survey, is in progress to mature additional exploration opportunities for drilling along this significant hydrocarbon resource play."
