The South Australian well, which has a total planned depth of 2650 metres, will be drilled as an offset to the earlier Jacaranda Ridge-1 well, which flowed 420 barrels of oil per day on a drill stem test in 1999 but was deemed uneconomic at the time

Adelaide Energy won the rights to PEL 255 almost a year ago, having committed more than $13 million in exploration investment over the next five years, of which about $7.3 million is guaranteed.

The company has committed to a 3D seismic acquisition, an aeromagnetic survey and drilling of two wells, together with geoscientific studies in the first two years of the program.

Managing director Carl Dorsch said the company planned to bring new exploration strategies to the Otway Basin.

"Reinterpretation of petroleum drilling and seismic data by Primary Industries and Resources SA has revealed the prospect has significant potential, and would benefit from advanced drilling and production technologies currently available to define new leads," Dorsch has said.

In 2005, Adelaide Energy secured one of the largest prospective Cooper Basin gas acreage releases ever awarded, and the last major petroleum block, to be released under the SA Government's 1998 initiative to attract more independent oil and gas explorers into the basin.