Over the weekend the well was drilled from 1972m to the current depth of 2240m through undifferentiated sandstones and shales of the Sherbrook Group. Persistent background gas readings of up to 500 parts per million have encouraged Essential to continue drilling as a sole-risk operation, the company said.

The non-participating partners can participate in the deepened Pritchard-1 well by paying their share of costs plus a premium as agreed in the farm-in agreements.

Essential said the deeper targets within the Sherbrook Group have the potential to host recoverable reserves in excess of 10 million barrels of oil or 17 billion cubic feet of gas. However, a commercial oil play has not been discovered in the Otway Basin in 139 years.

As drilling continues, Essential said it expects the mudstones to increase in thickness, providing an adequate seal for anticipated reservoir quality sands.

The Pritchard Prospect is mapped as a predominantly anticlinal closure, up-dip from fluorescence shows encountered at the Pebble Point level in the adjacent Henke-1 well that was drilled in 1987.

Under recently formalised farm-in terms with permit operator Essential, Bass Strait can earn a 25% interest in the PEP 151 permit by contributing to the Pritchard-1 well. In addition, the company has an option to earn a 15% interest in the adjacent PEP 150 permit application, which contains the Lindon-2 oil discovery.

Early last month, private petroleum firm Inland Oil Resource farmed-in to PEP 151 with a 25% interest.

Essential holds the remaining 50% stake.