CalEnergy made the move after the unsuccessful Eclipse-1 well, which it had been planning to drill for years. Wireline logging of the well demonstrated that there was no commercial gas in the primary target but found a thin oil sand zone in the Cattamarra Coal Measures.

Empire considers prospects for oil to be best explored at shallower depths along the Darling Terrace Trend, and the company has already developed a number of leads.

Empire together with CalEnergy has two aeromagnetic surveys, the recording of 444km of new 2D, 160 fold seismic and the reprocessing of a similar amount of existing seismic data in the Perth Basin, which delineated a portfolio of prospects from all of the data acquired. Only two of these prospects have been drilled as exploration wells to date.

The company said the Eclipse No 1 results, although disappointing, do demonstrate the potential for economic accumulations of both oil and natural gas in this part of the Perth Basin.

Empire and minor partner Nexus are still negotiating the future of CalEnergy's share in the permits

Consequently Empire is developing a revised exploration strategy. Revision of the company's prospect inventory, in particular, those prospective for oil is part of the revised exploration strategy.