Under the deal, Longreach Oil Limited will earn a 10% interest in EP 416 by contributing 13.33% of the costs of the upcoming Leschenault-1 well, to be drilled before the end of next February.

Longreach said the Leschenault prospect is a relatively shallow oil and gas play at about 850m sub-surface, with a target size of the order of a 100 million barrels of oil equivalent in place.

The operator of the project is Empire Oil, which has an 88% stake in the permit, Longreach earning 10% and Hardman Resources with the remaining 2%.