Erik Abrahamsen said it could take more than a decade for StatoilHydro to turn the Mizzen property into a commercial field. (CBC)

A potentially important new discovery has been found well off the eastern coast of Newfoundland, StatoilHydro Canada said Wednesday.

However, a company official cautioned that it will take many months to determine whether the find is worthy of development, and then years to bring it to fruition.

"This is a big day for StatoilHydro.... For us, it's a big step forward," StatoilHydro Canada vice-president Erik Abrahamsen told CBC News.

The company announced only that "hydrocarbons were encountered" during deepwater drilling in an area about 500 kilometres east-northeast of St. John's.

In an interview, Abrahamsen said he could not disclose whether that meant oil or natural gas was found at the site, where the drilling rig Henry Goodrich has been conducting work in what is known as the Mizzen property.

The drilling rig Henry Goodrich did tests that will lead to an application for a significant discovery licence in the Flemish Pass basin, off Newfoundland. (StatoilHydro Canada)

As an indication of its confidence in the find, StatoilHydro Canada will be applying to regulators for what's known as a significant discovery licence over the next few months.

Abrahamsen said its findings are confidential, and, even so, it will take a significant period of time to move forward.

"We need to analyze the data, and then in a year or two, we might be in a position to go on with further appraisal drilling to find out more [information]," he said.

"If the further appraisal drilling proves enough reserves to make this economically viable for development, then you are looking at least 10 years — maybe more, 15 years — before you can see any development and production from this possible field.

The Mizzen property is in a deepwater area called the Flemish Pass basin. The area has been relatively unexplored, but is considered an important frontier for oil and gas companies. The site is far away from the three fields now in production at the Jeanne d'Arc basin, southeast of St. John's.

"The drilling operation, conducted at a water depth of 1,100 metres and during the heart of the North Atlantic winter storm season, was very challenging," Abrahamsen said in the statement.

StatoilHydro Canada has been working on the Mizzen property, about 500 kilometres east-northeast of St. John's. (CBC)

"We are very pleased with the way that the rig, its crew and the local supply community successfully met the challenges."

Although beyond Canada's limit of 200 nautical miles, the find falls within Canada's jurisdiction because it is under the continental shelf. Rights to the Mizzen property were awarded by the Canada-Newfoundland and Labrador Offshore Petroleum Board.

StatoilHydro Canada holds a 65 per cent interest in the Mizzen find. Husky Energy holds the remaining 35 per cent interest.

StatoilHydro Canada, which is affiliated with the Norway-based oil giant, has long been a player in the Newfoundland and Labrador oil industry. It is a minority partner in the Hibernia and Terra Nova fields, and holds a stake in the undeveloped Hebron field.