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COP's Australian Drilling Campaign Yields Unexpected Gas Encounter
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Key Takeaways
COP's Charlemont-1 well encountered unexpected gas in the Waarre C formation while drilling offshore Victoria.
Drilling was paused Dec. 25 after high-pressure conditions at 2,552m raised safety and operational risks.
COP earlier found gas at Essington-1 in the same permit, confirming hydrocarbons in Waarre A and C reservoirs.
ConocoPhillips’ (COP - Free Report) Australian subsidiary, ConocoPhillips Australia, has unexpectedly encountered more gas while drilling the Charlemont-1 exploration well in the Otway Basin, offshore Victoria. The company booked the Transocean Equinox semi-submersible rig to carry out this exploration campaign offshore Australia. The rig previously made a gas discovery in the Essington-1 exploration well.
The Charlemont-1 exploration well was drilled in permit VIC/P79 using the Transocean Equinox rig on Dec. 10, 2025. While drilling, the well encountered a significant presence of gas in the Waarre C reservoir formation, which was approximately 160 meters above its target formation, Waarre A. ConocoPhillips’ partner, 3D Energi, stated that this was unexpected, as the pre-drill analysis had not indicated any presence of oil and gas in the shallower layers.
However, as of Dec. 25, the drilling operations were temporarily paused after encountering high-pressure conditions at 2,552 meters. Heightened pressure conditions may give rise to potential safety and operational risks, and suggest that the subsurface conditions may be more complex than initially anticipated. The operator is currently assessing potential adjustments to the well design aimed at ensuring that operations can safely resume to reach the primary target, the Waarre A reservoir.
As part of COP’s Otway basin exploration program, the company had previously drilled the Essington-1 well in the same permit as the Charlemont-1 well. The campaign yielded encouraging results, with a natural gas discovery announced at Essington-1. The Essington-1 exploratory well confirmed the presence of hydrocarbons in both Waarre A and Waarre C reservoir formations. The natural gas discovery at Essington-1 was the first one in the Otway Basin since 2021.
ConocoPhillips is the operator of the permit, holding a 51% interest. The other partners in VIC/P79 are Australia's 3D Energi and the Korea National Oil Company, with 20% and 29% stake, respectively.
Oceaneering International delivers integrated technology solutions across all stages of the offshore oilfield lifecycle. The company is a leading provider of offshore equipment and technology solutions to the energy industry. OII’s proven ability to deliver innovative, integrated solutions supports ongoing client retention and new business opportunities, ensuring steady revenue growth.
Subsea7 helps build underwater oil and gas fields. It is a leading player in the global offshore energy industry, providing engineering, construction and related services at offshore oil and gas fields. The long-term outlook for energy demand remains positive, and Subsea7’s focus on cost-efficient deepwater projects strengthens the position of its subsea business.
FuelCell Energy is a clean energy company offering low-carbon energy solutions. It produces power using flexible fuel sources such as biogas, natural gas and hydrogen. The company designs fuel cells that generate electricity through an electrochemical process that combines fuel with air, reducing carbon emissions and minimizing the environmental impact of power generation. As such, FCEL is anticipated to play a crucial role in the energy transition by enabling industries and communities to shift from traditional fossil fuels to low-carbon alternatives.
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COP's Australian Drilling Campaign Yields Unexpected Gas Encounter
Key Takeaways
ConocoPhillips’ (COP - Free Report) Australian subsidiary, ConocoPhillips Australia, has unexpectedly encountered more gas while drilling the Charlemont-1 exploration well in the Otway Basin, offshore Victoria. The company booked the Transocean Equinox semi-submersible rig to carry out this exploration campaign offshore Australia. The rig previously made a gas discovery in the Essington-1 exploration well.
The Charlemont-1 exploration well was drilled in permit VIC/P79 using the Transocean Equinox rig on Dec. 10, 2025. While drilling, the well encountered a significant presence of gas in the Waarre C reservoir formation, which was approximately 160 meters above its target formation, Waarre A. ConocoPhillips’ partner, 3D Energi, stated that this was unexpected, as the pre-drill analysis had not indicated any presence of oil and gas in the shallower layers.
However, as of Dec. 25, the drilling operations were temporarily paused after encountering high-pressure conditions at 2,552 meters. Heightened pressure conditions may give rise to potential safety and operational risks, and suggest that the subsurface conditions may be more complex than initially anticipated. The operator is currently assessing potential adjustments to the well design aimed at ensuring that operations can safely resume to reach the primary target, the Waarre A reservoir.
As part of COP’s Otway basin exploration program, the company had previously drilled the Essington-1 well in the same permit as the Charlemont-1 well. The campaign yielded encouraging results, with a natural gas discovery announced at Essington-1. The Essington-1 exploratory well confirmed the presence of hydrocarbons in both Waarre A and Waarre C reservoir formations. The natural gas discovery at Essington-1 was the first one in the Otway Basin since 2021.
ConocoPhillips is the operator of the permit, holding a 51% interest. The other partners in VIC/P79 are Australia's 3D Energi and the Korea National Oil Company, with 20% and 29% stake, respectively.
COP’s Zacks Rank and Key Picks
COP currently carries a Zacks Rank #3 (Hold).
Some top-ranked stocks from the energy sector are Oceaneering International (OII - Free Report) , Subsea7 S.A. (SUBCY - Free Report) and FuelCell Energy (FCEL - Free Report) . While Oceaneering and Subsea7 currently sport a Zacks Rank #1 (Strong Buy), FuelCell carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Oceaneering International delivers integrated technology solutions across all stages of the offshore oilfield lifecycle. The company is a leading provider of offshore equipment and technology solutions to the energy industry. OII’s proven ability to deliver innovative, integrated solutions supports ongoing client retention and new business opportunities, ensuring steady revenue growth.
Subsea7 helps build underwater oil and gas fields. It is a leading player in the global offshore energy industry, providing engineering, construction and related services at offshore oil and gas fields. The long-term outlook for energy demand remains positive, and Subsea7’s focus on cost-efficient deepwater projects strengthens the position of its subsea business.
FuelCell Energy is a clean energy company offering low-carbon energy solutions. It produces power using flexible fuel sources such as biogas, natural gas and hydrogen. The company designs fuel cells that generate electricity through an electrochemical process that combines fuel with air, reducing carbon emissions and minimizing the environmental impact of power generation. As such, FCEL is anticipated to play a crucial role in the energy transition by enabling industries and communities to shift from traditional fossil fuels to low-carbon alternatives.