Gaelic Resources is embarking on a major appraisal programme with its venture partners to develop the gas find at the Portuguese Aljubarrota 2 well, now the main focus of its activities.
Dr Colin Phipps, executive director of Gaelic, said at yesterday's annual general meeting that the low pressure find in limestone rock could be commercially viable.
He said three appraisal wells would be drilled and production testing would be carried out at the site over three years at a cost of $10 million (€9.26 million).
Gaelic has a 25 per cent interest in the well, which is operated by Mohave Oil and Gas Corporation.
Mohave Oil has "flared" the gas, meaning that it has been ignited to test its quality. Dr Phipps said it was "very good quality gas and there is a lot of it". "We know we have good gas, we know we have a suitable reservoir, we know, unfortunately, it is lower pressure than we would like. So the next step is to ensure we can produce this gas economically."
Dr Phipps is also chairman of Desire Petroleum, an AIM-listed company with interests off the Falkland Islands. It is in merger discussions with Gaelic.
