This is the first well in the previously announced three-hole drill program scheduled for the EP129, L6 and L8 permits.

Boundary SE-1 is up dip from the Boundary-1 well, which has produced 115,000 barrels of 330 API oil from an intra-Grant sandstone bed at a depth of 1277-1281m.

Seismic data indicates the well was drilled on the northwestern edge of an anticline and that the crest of the structure is to the southeast. The joint venture believes a well drilled to the crest of the anticline has the potential to produce oil from the intra-Grant sandstone, while oil potential also exists in a deeper unit known as the Anderson Formation.

JV partner European Gas, which changed its focus and name from Kimberley Oil earlier this year, is also diluting its interest to 20% in EP129 permit holder Terratek Drilling Tools. This move has allowed Golden Dynasty to exercise its right to earn up to an 80% interest in the company.

Terratek is also the permit holder of PLs L6 and L8 and technology owner/developer of the Kolascai oil solidification process.

In addition to its equity interest in Terratek, European Gas will retain a 2% well-head royalty in the permits and licences, and a 5% gross royalty in the technology.

On behalf of Terratek, Golden Dynasty will act as operator for the drilling program and is required to spend a total of $3.5 million in exploration expenditure and research.

European Gas also holds 28,700 square kilometres of leases in the Canning Basin that are in the process of being sold to Arc Energy.

European Gas changed its name in January to reflect its new focus on coal seam methane in Western Europe.