HONG KONG, Aug. 28 (UPI) -- Hong Kong's Mirach Energy said it was taken by surprise by the discovery of an oil zone while drilling in the Kampung Minyak oil field in South Sumatra.

The company announced it "unexpectedly uncovered" a new oil zone while drilling deeper into its KM-607 well, which was started Aug. 9. It said the new discovery was encountered beneath and older oil-producing layer.


Chief Executive Officer William Chan said his company was surprised by the discovery.

"Our production team is expecting this to be a very good production well, compared to the earlier new wells drilled," he said in a statement Tuesday. "A series of tests and perforations will be done to optimize production and actual production rate from the well will be known within the next two weeks."

The company in its second quarter earnings report, published Aug. 13, said it was working to reach a stable level of production at Kampung Minyak. It said it had approval from regulators for four new wells.

Existing production was low though the company said it was operating within its contractual obligations.