Chevron Australia Pty Ltd – an affiliate of Chevron Corporation ( CVX - Analyst Report ) – announced the discovery of natural gas in Satyr-4 exploration well in the Greater Gorgon Area, offshore Western Australia.

Located in the WA-374-P1 permit block in the Carnarvon Basin, the well is estimated to hold approximately 220 feet of net gas pay. The well, about 75 miles to the northwest of Barrow Island, was drilled 3,570 feet deep into water and to a total depth of 15,023 feet.

The Australian unit of Chevron acts as the chief operator of the block with 50% interest, while the remaining stake is shared equally by Royal Dutch Shell plc ( RDS.A - Analyst Report ) and Exxon Mobil Corporation ( XOM - Analyst Report ) .

We believe that this exploration success will boost Chevron’s growth prospects in Australia by adding to its already significant gas interests in the country.

Earlier in September, the company announced the discovery of natural gas in Satyr-2 exploration well in the Greater Gorgon Area, which marked Chevron’s fifteenth find in the country since mid-2009.

In particular, the drilling success of the Satyr-4 exploration well is expected to support an expansion of the Chevron-operated multi-billion Gorgon liquefied natural gas (LNG) project.

The Gorgon gas fields, off the coast of Western Australia, are estimated to contain 40 trillion cubic feet of gas deposits with an expected economic life of at least 40 years from the time of start-up. According to Chevron, the venture will have an annual capacity to produce 15 million tons of LNG, with the first shipment expected in 2014.

We believe that successful drilling activities along with these prominent projects will establish Chevron as a leader among natural gas and LNG suppliers in the Asia-Pacific belt.

Chevron currently holds a Zacks #3 Rank (short-term Hold rating). We also maintain a long-term Neutral recommendation on the stock.