"The increase in condensate yield with depth demonstrated by the testing we have undertaken to date give us a basis for optimism for even higher yields below this tested interval," InterOil chief executive officer Phil Mulacek said.

"These results continue to reinforce the project economics of our condensate stripping joint venture, which is progressing with our partner Mitsui & Co Ltd."

The company said it now plans to drill a sidetrack from the current Antelope-2 horizontal wellbore and drill a second horizontal section 10-15m deeper in the reservoir to evaluate the reservoir quality and further test the condensate ratio.

It is also evaluating the next drilling location based on newly acquired and evaluated seismic and information derived from the directional drilling and horizontal program.

InterOil and Mitsui are working together on a condensate stripping facility at the Elk and Antelope fields in Gulf province.

This is aimed at processing 400 million cubic feet of gas to yield about 9000 barrels of condensate per day.

Dry gas will then be reinjected into the reservoir for storage until the proposed Liquid Niugini Gas LNG facility has been built.