The Brasher-1 exploration well in Texas, US, has struck a gas column, New Standard Energy said.
The company said it encountered a 14ft gas column in the Yegua formation where drilling took place up to a planned depth of 5,000ft.
Three thinner Yegua zones have also been identified deeper in the well and will also be flow tested.
Production facilities will be installed and the well will be linked to a nearby pipeline for gas sales.
The oil well is the first of the six wells that New Standard plans to drill in the US in 2010.
New Standard holds a 32.5% working interest in the Brasher-1 well.