BHP Billiton Ltd/plc said drilling results from its Neptune-3 appraisal well in the Gulf of Mexico have delivered positive results.
In a statement, the company said the well was drilled to a measured depth of 18,643 feet and has been temporarily abandoned.
"The well encountered 450 gross feet of hydrocarbon column, with approximately 130 feet of net oil pay in a similar Miocene age reservoir as seen in Neptune-1 and 2. An additional 20 feet of net oil pay was also encountered in a younger Miocene age reservoir," it said.
After integration of final fluid sample analysis, petrophysical interpretation and new seismic data, BHP Billiton and its partners will select a subsequent location for appraisal drilling and expect to commence further operations within six months.
BHP Billiton is the designated operator of the five-block unit with a 50% working interest, while Marathon Oil Co has a 30% interest and Woodside Petroleum Ltd has 20%.
Pending the further appraisal results, the development options include a tieback to a future production hub in the area or a stand-alone production facility, it said.
BHP Billiton Petroleum's Steve Bell said: "This is a positive outcome. We knew we had oil in the reservoir but previous results suggested that the flow characteristics of the fluids from Neptune-2 were poor and inadequate to sustain a commercial development."
"However with this well result, we have not only confirmed the oil column but also demonstrated that the hydrocarbons have significantly better flow properties, offering the potential for development," he said.
Bell said the company will need to evaluate all the data and carry out further appraisal activity in order to fully assess the commercial potential of the accumulation.