Merrill Lynch called the Liwan 3-1-1 discovery new evidence of terrific potential of offshore China. It is China's largest offshore find to date.

In comparison, China's largest-ever onshore gas discovery, Sinopec's Puguang gas field, Sichuan Province, came to just over 8.8 trillion cubic feet of recoverable reserves.

Husky says it is evaluating the well results and further drilling of block 29/26 is expected to happen after three-dimensional geological data is reviewed.

Husky has been working with CNOOC since 2002 to actively explore the waters off China. The Canadian company signed a production sharing agreement for the area in 2004 and now holds three exploration blocks in the South China Sea. Meanwhile partner CNOOC's listed unit, Hong Kong based CNOOC Ltd, has the right to participate in the development of any discovery for up to 51% working interest.