ConocoPhillips COP, a leading exploration and production company, has encountered probable gas in all three Waarre reservoirs, which were originally targeted, while drilling the Charlemont-1 exploration well in the Otway Basin, offshore Victoria. The company drilled the Charlemont-1 exploration well in permit VIC/P79 using the Transocean Equinox rig on Dec. 10, 2025. Its partners in the license, 3D Energi and Korea National Oil Corporation, had previously mentioned that they had to pause drilling operations temporarily due to high-pressure conditions encountered at a depth of 2,552 meters.

Charlemont-1 Well Delivers Encouraging Results

Drilling operations resumed in early January, and the exploration efforts have yielded encouraging results. The Charlemont-1 exploration well has encountered probable gas in the three targeted sandstone reservoirs after identifying heightened formation pressures. During the resumed drilling, results showed elevated gas readings, an early sign of hydrocarbon presence. Furthermore, the resistivity logs recorded were supportive of the presence of hydrocarbons in the Waarre C, B and A formations. Previously, drilling operations at Charlemont-1 had indicated a significant gas presence in the Waarre C reservoir formation, which was approximately 160 meters above the target Waarre A formation.

High Formation Pressures Force Temporary Drilling Suspensions

After recording a significant presence of gas and heightened pressure conditions at a depth of 2,552 meters, the company temporarily paused operations. To continue with the drilling activities safely and maintain well control, the operator installed a seven-inch liner. Following this, drilling resumed toward the target Waarre A formation. The well was drilled to a measured depth of 2,753 meters below the kelly bushing (MDKB) by Jan. 7, 2026. At this depth, the well again encountered unexpectedly high-pressure conditions, which prompted the operator to pause drilling earlier than planned. The elevated formation pressure may give rise to potential safety and operational risks. The operator is now analyzing different wireline logging scenarios, which provide information on the reservoir properties, as well as the quality and extent of hydrocarbon presence in the Waarre sandstone reservoirs.

Australia’s 3D Energi has stated that the initial results from the Charlemont-1 exploration well have been encouraging, with gas presence across multiple Waarre reservoirs. Notably, the company had not expected to encounter probable gas presence in the Waarre C formation. The company remains optimistic about the results as it proceeds with the evaluation phase.

Story Continues

ConocoPhillips’ Presence in the Otway Basin

ConocoPhillips has previously discovered gas at the Essington-1 well in the Otway Basin. The Essington-1 exploratory well confirmed the presence of hydrocarbons in both Waarre A and Waarre C reservoir formations. COP holds a 51% stake in the VIC/P79 permit, while its partners 3D Energi and the Korea National Oil Company hold 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 Subsea7 S.A. SUBCY, Oceaneering International OII and FuelCell Energy FCEL. While Subsea7 and Oceaneering currently sport a Zacks Rank #1 (Strong Buy) each, FuelCell carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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.

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.

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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