FAR this morning said it would earn a 9% interest in a 14,000 foot test of the three objectives within the pressured Middle Wilcox formation that have been independently appraised as having probable recoverable reserves of approximately 39 billion cubic feet of gas and 1.4 million barrels of oil.

The farm in area comprises 1,000 acres of the Welder Ranch lease, located in Victoria County, South Texas.

“The three target horizons lie between 12,000 and 13,500 feet and are defined by 3D seismic tied into three nearby producing wells that are presently producing at an impressive combined rate of 32 million cubic feet of gas per day providing good evidence that the current test has high impact potential. AVO amplitude anomalies are very obvious on the seismic data, possibly indicating gas charged reservoir objectives.”

FAR said a pipeline is located less than 3,000 feet from the drill site, providing excellent logistics for early sales. Provided the project is successful FAR said payout was expected within 6 months.

Under the terms of the agreement FAR will pay 11.25 percent of the drilling and completion cost to earn a 9% working interest in wells drilled within the project area. The well is estimated to cost US$2.7 million.

FAR said it was the only ASX-listed entity participating in the project.