Canadian exploration company has drilled a new well and found possible oil deposits at Moruga.

Calgary-based Parex Resources Inc said its Firecrown-1 well, the first of three Trinidad exploration wells planned this year, reached a total measured depth of 8,701 feet on June 14.

Based on the interpretation data, the well encountered "potential hydrocarbon-bearing sandstones with oil shows", the company said in a statement.

Parex expects to have a service rig move onto the Firecrown-1 location to conduct a testing programme.

The drilling rig has been mobilised to the second Moruga Block location, Snowcap-1 which was spud on July 16.

Following the drilling of Snowcap-1, Parex plans to move the drilling rig from the Moruga Block to the Central Range Block.

An application for regulatory approval to drill a shallow horizon prospect was submitted in June 2009, the company said.

The earning terms of the Moruga Block require Parex to drill one exploratory well to a depth of 8,600 feet or the top of the Cretaceous, whichever occurs first and one exploratory well to 10,500 feet.

The exploration term of the Moruga Block licence expires on August 29, 2013.

Wayne Foo, the company's president and CEO, said in a statement on the company's website that "being able to start our exploration programme with positive drilling results in both Colombia and Trinidad plus expand our prospect inventory with the award of a new Colombian block provides momentum to our business plan. This has also given us the opportunity to add a second drilling rig to our Llanos Basin blocks".

Parex, through its direct and indirect subsidiaries, is engaged in oil and natural gas exploration, development and production in South America and the Caribbean region.

Parex is conducting exploration activities on its 223,500 acre holdings onshore Trinidad.