Puffin-8 produced up to about 12,000 barrels per day a ¾-inch choke before being shut in, and Puffin-7 has subsequently been commissioned, reaching a maximum rate of around 16,000bpd.

Currently, the flow from both wells is being combined. AED said it planned to gradually increase the total flow through the process facilities to the interim commissioning rate of 27,000bpd today, before progressing to stabilised production rate.

Meanwhile the company has mobilised the Wilcraft jack-up drilling rig, which is mow on location and preparing to spud Puffin-10, a production well in the Puffin South West region, on Wednesday.

The Melbourne-based midcap said the primary objective of the well was to drill and complete a horizontal section of a 200m-plus reservoir interval within the Upper Cretaceous (UK1a) sands.

AED expects to take about 55 days to drill and complete the well, with the jack-up working in water depths of about 84m.

AED said production from Puffin-10 would be directed through the Modec Venture (MV1) floating production storage and offtake (FPSO), and that production from Puffin SW was expected to start in the first half of 2008.

The company also said that to meet some of the initial cashflow requirements of the Puffin-10 drilling program, it had placed 2 million fully-paid ordinary shares at an issue price of $7.70, with the issue price representing a 5% discount to the prevailing share price of $8.26.

The S15.4 million of additional capital would be used for ongoing developments works and working capital, AED added.

The company said testing and pre-commissioning works at Puffin North East (NE) was continuing, with first oil production expected within the next couple of days, following full testing of the FPSO Front Puffin under operating conditions.

Production from the field would start by bringing the Puffin-8 development well onstream gradually. The well would then be shut in while the process was repeated for Puffin-7.

Once satisfactory commissioning of both wells had been completed, production was expected to reach full operating levels within two weeks.

AED operates Puffin, with a 100% participating interest, and the AC-P22 exploration permit and AC-L6 production licence, all of which are in the Vulcan Sub-Basin of northwestern Australia.

Perth-based junior Norwest Energy holds a 1.25% overriding royalty interest in Puffin production.