Cobalt-1 is designed as a stratigraphic test of the Late Permian Bandanna Formation coals that are known to be present in the Cobalt prospect area.

The well site was selected following interpretation of the results of the company's Cobalt seismic survey in 2007.

Blue Energy said the prospect is believed to be a close analogue to Santos' Fairview and Origin's Spring Valley fields.

The well is part of a 15-well CSM exploration program across five of its tenements in the state.

Blue Energy had started work on the six-month program earlier this month after spudding the Indigo-2 well in ATP 818P that was designed to core the entire Walloon Coal Measures of the Surat Basin in the Indigo prospect.

Other tenements that will be covered by the program are ATP 817P, ATP 814P and ATP 896P.