The No 2 well follows the successful Vermilion 258 No 1 well which was drilled recently from the same location and encountered six hydrocarbon bearing sands with an estimated 24 to 29m of net gas pay.

Petsec said production casing would now be set prior to suspending the No 2 well for future production.

Earlier this month, Petsec announced the development go-ahead for the Vermilion 258 gas field which is located 114km south of Vermilion Parish, offshore Louisiana, in the Gulf of Mexico.

"We expect production from the Vermillion 258 lease to commence mid-year following the US$7.8 million installation of a platform and pipeline capable of handling up to 45 million cubic feet of gas per day," said Petsec's executive chairman, Terry Fern.

"With the success of this second well, initial production is expected to be in the order of 15 to 25 million cubic feet of gas per day," Fern said.

"The new production facilities will be capable of being easily modified to accommodate increased production from any further success with additional wells scheduled for drilling during 2004."

Petsec Energy has a 100% working interest and 83.33% net revenue interest in the Vermillion 258 #2 well.