There are no half-measures in this move. Stuart is taking operatorship in the prospect and if the first well is successful, Stuart will earn a 50% interest in the relevant discovery area. It may later choose to take 50% and operatorship in the Vic/53 permit as a whole.

Stuart will begin its involvement in the block by committing to the drilling and sole funding of an exploration well, Bazzard-1, to test a four-way dip closure that the company believes could hold 30-50 million barrels of oil.

Managing director Tino Guglielmo said Bazzard was in a good neighbourhood and sophisticated seismic work had given the company confidence in the prospect.

“The Vic/P53 permit is surrounded by world-scale oil and gas discoveries and is host to outstanding oil and gas potential,” Guglielmo said.

“Stuart Petroleum’s geological and geophysical team has mapped prospects in the permit using 3D data recently acquired by the current permit holders. These data have been processed to deal with the degree of seismic complexity which results from overlying high-velocity canyon fill which transects the permit area.

“Earlier wells in the permit area were drilled without the benefit of 3D seismic and none of the early wells are now believed to have been optimally located.”

Guglielmo said the Bazzard structure showed seismic amplitude anomalies broadly coincident with the areas of structural closure of two highly permeable sand horizons.

“These sands have been recognised from previous drilling in the basin,” he said. “The amplitude anomalies are considered likely to be mapping contrasts in seismic impedance, characteristic of either gas/water or oil/water contacts.”

Each of these two sands are sealed by overlaying shales and they are both believed to be well located to trap oil and gas generated in the thick sediments underlying this sector of the Gippsland Basin, he said.