The company said good shows were recorded from the Cadna-owie Formation, while poor shows were noted in the primary McKinlay Formation objective and the secondary Murta Formation.

These formations will be further evaluated with wireline logs and potentially drill stem tests after the well has reached total depth.

Stuart said it expected the next primary target, the Hutton Formation, would be intersected tomorrow.

The company said a Hutton oil discovery at Toparoa was expected to have similar reservoir properties to Derrilyn.

This morning, Toparoa-1 was drilling ahead at a depth of 1350 metres in 8.5-inch hole. The well has a total planned depth of 1624 metres.

If the partners have success at Toparoa-1, a second well Toparoa-2 will be drilled immediately afterwards to appraise the southern extent of the field.

Toparoa-1 is within the Merty Merty pastoral lease, about 50km south-southeast of Moomba and 1.1km southwest of the Derrilyn oil field.

Derrilyn-1 has produced more than 600,000 barrels of oil from the Hutton reservoir, and on pump was capable of producing at more than 2000 barrels of oil per day, Stuart said.

Three hundred metres away, Derrilyn-2 was also capable of producing more than 2000 barrels of oil per day.

Stuart Petroleum holds a 100% interest in Toparoa-1, however Avery Resources is farming in to earn a 35% interest in the prospect, by funding 100% of the well costs.