JV partner Santos said the well, which reached a total depth of 3675 metres, intersected hydrocarbons in both the primary and secondary objectives, and confirmed the stratigraphic potential of the play.

“Flow tests were conducted, however commercial rates were not established over the intervals tested,” the company said in an ASX statement.

There had been hopes that Firebird could contain up to 1.4 trillion cubic feet of gas.

Santos has endured a string of ‘neutral’ market opinions since early this year. But a successful discovery at Firebird-1 had been predicted by brokerage ABN Umbro to help raise the company’s share price by about 24 cents. Santos closed 21c lower, or 1.7%, on the ASX yesterday.

Commercial production from the prospect was expected for tieback to Bayu-Undan, to increase the gas available for marketing from DLNG-1. Bayu-Undan is 19km away from JPDA 03-12, in the Australia – East Timor petroleum joint development area.

However, Santos said the well had confirmed the stratigraphic potential of the play. The well did intersect gas in two sections but the gas didn't flow at commercial rates. The partners are likely to investigate the play further to determine why this has happened.

The Ocean Bounty rig, which drilled Firebird-1, will shortly move to the Magnolia prospect, 250km away, which has big impact potential for junior partners Norwest Energy, Adelphi, and Bounty Oil & Gas.

Drilling of Magnolia-1 has been put back to late December, after the rig was held up with extensions to work at Firebird-1.

Joint venture partners in JPDA 03-12 are: ConocoPhillips Pty Ltd (operator - 42.4%); Santos Pty Ltd (21.4%); Inpex Sahul Ltd (21.2%); Petroz Pty Ltd (13.4%); and Emet Pty Ltd (1.6%).