Gaelic Resources has said the drilling programme on the Portuguese Aljubarrota 2 well in the Lusitanian Base has the potential to be "a major gas discovery".

Gaelic has a 25 per cent interest in a joint venture on the well which is operated by Mohave Oil and Gas Corporation, and expects to hear the results of the current drilling programme on the well in October.

"We are confident the well will yield significant indications of hydrocarbons and that would be a major move forward for the company," Mr Ian Forrest, chairman, told the annual general meeting in Dublin yesterday.

The company's first well in the area, Aljubarrota 1, has become plugged by mud used in the drilling process. If the Aljubarrota 2 well yields satisfactory results Gaelic will initiate a major development programme and will commission further seismic research. One further drilling programme will also be needed before the well can be confirmed as commercially viable. All this will involve the raising of further finance.