A commercial oil play has not been discovered in the Otway Basin for 139 years.

Essential also farmed-out a 25% interest to Bass Strait Oil in November last year.

The company said IOR and Bass Strait Oil would earn their interests in PEP 151 by funding the drilling of Pritchard-1 well to the Pebble Point Formation/Timboon Sandstone at the base of the Tertiary.

Subject to rig availability, the well is now expected to spud in early March.

Pritchard-1 will test a series of stacked targets in the predicted oil fairway on the flanks of the Portland Trough, Essential said.

The primary target is the Pebble Point Formation at the base of the Tertiary with secondary targets in the lower Sherbrook Group. The Pebble Point play has generated multiple oil shows and recoveries in PEP 151 and adjacent areas, the company said.

The Pritchard Prospect has a potential mapped volume of 4 million barrels of recoverable oil. The deeper Sherbrook Group reservoir contains a potential 10 million barrels of recoverable oil or 17 billion cubic feet of recoverable gas, according to Essential.

“Pritchard-1 is significant because it is the first well in the Portland Trough to test a significant fault-independent closure,” Essential managing director John Remfry said.

“This is a major positive factor in the Otway Basin, where leakage related to faulting is an ever-present risk.”

The Portland Trough is a northwest-southeast oriented structural feature, about 100km long and 30km wide, extending from offshore to onshore Portland.

Remfry said the feature was unusual in the Otway Basin because of its thick loading and early Tertiary age sediments. This loading has pushed the source rocks through the oil generation window, he said.

“Hydrocarbons generated in the Portland Trough kitchen is likely to have migrated via faults and permeable sediment layers into hydrocarbon traps such as the Pritchard anticline,” Remfry said.

“A discovery at Pritchard-1 would highlight a series of follow up targets within the Portland Trough with the potential to host, on an unrisked basis, in excess of 100 million barrels of oil.”

He added that geological modelling predicts oil is present on the flanks of the Portland Trough. An oil presence has been indicated from earlier drilling in the region, including Lindon 1 in 1984, and 1987’s Windemere-1.

Inland Oil Resources is a wholly-owned subsidiary of IOR Energy, which was founded in 1984.

Essential said IOR Energy had become a leader in oilfield development, production and refining in remote onshore locations.