The company's managing director is Rod Hollingsworth - a former Delhi Petroleum and Stuart Petroleum executive and veteran Cooper Basin explorer.

“The block is surrounded on three sides by some of Australia’s more prolific onshore producing gas fields and high intensity modern day exploration activity,” Hollingsworth said.

“Significantly, the acreage covers one of the two primary source areas for gas for the wider Cooper Basin blocks in South Australia.”

He claims only seven wells have been drilled in the area, as the gas was held in tight sands. Most of these wells were drilled decades ago, as gas exploration and production had historically exploited the more permeable reservoirs to the north, south and west. They were now ripe to be revisited, he said.

“Drilling techniques and exploration modelling have exploded in the past 10 years and virtually all of the new and successful onshore United States exploration and production is coming from exploiting tight oil and gas reservoirs,” Hollingsworth said.

The south-western perimeter of the acreage – the 1600 square kilometre CO2005-A block in the Nappamerri Trough – is 25 kilometres northeast of the Moomba gas processing plant.

Adelaide Energy said the area was the last major petroleum block to be released under the state government’s 1998 initiative to attract aggressive, independent oil and gas explorers into the South Australian section of the Cooper Basin.

In a break from traditional Cooper Basin gas exploration, the company expects international involvement, particularly from the United States, in implementing specialist exploration and drilling programs for the block.

But a public float of the new company and its assets is not planned for at least six months.

Adelaide Energy’s first well is expected to be drilled in the third quarter of 2006, initially targeting potential oil accumulations in the overlying Eromanga sediments. Subsequent wells will test the deeper gas formations in the Cooper Basin to a total depth of about 3,000 metres.

“We expect that structural analysis, deviated drilling and fracture stimulation will be the norm by which Adelaide Energy emerges as a successful explorer and producer in the Nappamerri,” Hollingsworth said.

“These are now recognised gas production techniques and, combined with more modern seismic and interpretative exploration than has been previously applied to these sands, we are confident of establishing a new production province close to Moomba.”

The other directors on the Adelaide Energy Board include corporate lawyer, Neville Martin, and corporate advisor, Mark Lindh – both from Adelaide.

Martin, a partner with the law firm Minter Ellison, has played a leading role in the formation of a number of oil and gas exploration companies and was a founding director of Stuart Petroleum.

Lindh is a director of Rundle Capital Partners and played a leading role in the formation of Sundance Energy Australia. He is a financial adviser to several resource companies.