Updated from 1:20 p.m. EST

Chinese energy firm


(CEO) - Get CNOOC Limited Sponsored ADR Report

confirmed a major natural gas find in the South China Sea on Monday.

The Liwan 3-1-2 well is located about 215 miles southeast of Hong Kong in the South China Sea. The well is located in the deepwater block 29/26 in the Pearl River Mouth Basin.

The well flowed at a restricted test rate of 56 million cubic feet per day. The company expects the well to flow at 150 million cubic feet per day unrestricted.

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The well reaches a total depth of 12,827 feet and has a water depth of 4,438 feet. The hydrocarbon-producing structure has roughly 33 square miles of mapped closure. Cnooc said in a press release that the Liwan 3-1-2 well encountered 118 feet of net pay over the main reservoir zone.

Cnooc is partnered with

Husky Energy

in the well. Cnooc owns a 51% working interest when the project reaches the developmental drilling phase. Husky owns the right to operate the wells in the 29/26 block.

Husky Energy is listed on the Toronto Stock Exchange.

Last week, Cnooc said that it will begin operating its first major refinery in late March. The refinery will allow the company to market refined hydrocarbon products to southern China's Guangdong province. Cnooc also plans to open up retail gasoline stations to bring refined products to market.

Cnooc's Monday announcement about its successful Liwan 3-1-2 well is an indication that Cnooc will continue exploring for new hydrocarbon resources even as the company grows from a pure-play E&P company into an integrated energy provider.

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On the Nymex, front-month West Texas crude was losing 14 cents to $38.30 per barrel, and natural gas was adding three cents to $4.12 per million British thermal units.