“Reservoir quality is seen as the main risk in Padulla-2, with trap geometry established and hydrocarbons present,” managing director Tino Guglielmo said.

Using the Century Rig 3 to drill to a planned total depth of 1511 metres, Padulla-2 is targeting 3.38 million barrels of in-place oil in the Murta formation and 1.6 million barrels in the McKinlay Member.

Stuart said results from Padulla-1 indicated oil has migrated into the Murta Formation area, with oil flows expected from thin, high permeability sands.

McKinlay is another primary target, which produces to the north in Stuart Petroleum’s Worrier oil field. But the company said the reservoir was of poor to fair quality with modest flow rates.

Secondary target, the Cadna-owie Formation had oil shows in Padulla-1, but the reservoir quality was considered poor, said the company. Stuart added that production from this formation in the SA area of the Eromanga Basin was “very limited.”

“Padulla-1 had oil and gas shows in the Cadna-owie, Murta and McKinlay Formations, however no tests were run because the oil shows were considered to be insignificant,” Guglielmo said.

The company said the recent Harpoono-1 discovery in the Murta Formation to the east of PEL 113 had similar oil shows and electric log response seen in Padulla-1.

“On test, Harpoono flowed 175 barrels of oil per day and to date has produced more than 20,000 barrels of oil,” Guglielmo said.

He added that Padulla was the highest potential trap on the Dirkala Ridge structural feature.

In June 2004, Harpoono-1 flowed at 140bpd on test and was completed as an oil producer, but reserves were less than pre-drill expectations after oil was discovered in only one zone rather than two.

Stuart has 100% equity in the permit.