Drilling of Udacha-1, to be operated by Beach Petroleum using the Century Resources Rig-3, will start in January next year, immediately following the completion of the Rossco-1 well to be drilled next month by Great Artesian in PEL 106.

By participating, Magellan is exercising its farm-in option under an agreement signed on August 29 this year. As part of this agreement, Magellan has already funded Great Artesian’s 60% share of the costs to drill Kiana-1 and Tyringa-1 wells in adjacent PEL 107.

Kiana-1 was cased and suspended as a future oil and gas producer, with cased hole production testing due to start in the next week, Great Artesian said.

The Udacha Prospect stretches across the PEL 91 and 106 bounday, down-dip and on the same structural trend as the Carrickalinga Prospect, in which a minor oil recovery was made in late 2003, it said.

“The Carrickalinga-1 results demonstate that oil has moved up into this structural trend and the Udacha Prospect is a robust faulted anticline sitting on the outer edge of this trend,” Great Artesian managing director Ray Shaw said.

“It had not been previously targeted for drilling simply because the PEL 91 and 106 permit boundary roughly dissects the prospect.”

Earlier this year, the participants of these permits - Great Artesian and Beach Petroleum – started negotiating a pre-drill agreement to unitize their respective interests across the Udacha Prospect.

Great Artesian said the Udacha Prospect has the potential to accommodate up to 2.3 million barrels of P10 recoverable oil, or about 10.5 BCF of P10 gas, with the Patchawarra Formation as the primary reservoir target.

The secondary reservoir targets will be the Toolachee and Epsilion formations and Tirrawarra Sandstone.

Following completion of farmin agreements, the participants in the Udacha Prospect will be Great Artesian (32.5%) and Beach (operator and15%). Magellan (30%), Enterprise Energy NL (12.5%) and Rawson Resources (10%) will only earn their interests following a commercial discovery.