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Wireline tests have confirmed the presence of oil at the Echidna-1 well off Brazil's southeast coast, block operator Karoon Gas Australia said on Monday.
In a statement, Karoon said samples from a 213m oil column found oil with an API quality reading of 39.5 degrees.
"Echidna adds incremental resource to Karoon's discovered Kangaroo oilfield which further supports Karoon's ambitions to develop an integrated production hub in the Santos basin," managing director Robert Hosking said.
Karoon added production tests would begin within days and a decision on whether to drill a second well will be made "in the coming weeks."
Echidna is located in the S-M-1102 block, in which Karoon holds a 65% stake alongside Pacific Rubiales.
Last month Karoon abandoned drilling at the nearby Kangaroo West-1 well after failing to find recoverable hydrocarbons.