Spudded on Friday night, the well was yesterday at a depth of 108m where it was preparing to be drilled ahead in a 26-inch hole.

The West Atlas rig will initially drill two wells for MEO in NT-P68, in the eastern Bonaparte Basin of the Timor Sea.

The rig can work in up to 120m of water, with MEO's wells in relatively shallow water, ranging from 35m to 65m.

Following Heron-2, the rig will move to the Heron-3 well, aimed at testing the commercial viability of hydrocarbons in a 500-metre horizontal section through the Darwin Formation, the reservoir section of the large Epenarra structure.

MEO also has the option to drill a third well once Coogee Resources finishes its drilling campaign.

MEO managing director Chris Hart said the Heron-2 and Heron-3 wells were targeting the two gas-bearing horizons in the Darwin formation and the deeper Elang-Plover Formation, observed in the Heron-1 well.

The two-well campaign will be funded 75% by MEO and 25% by farminee Petrofac Energy Developments, in return for a 10% stake in the permit.

Petrofac has an option to increase this stake to 15% by funding 37.5% of the well costs.