Under the agreement, AOC will pay 36.1% of the cost to drill one well in the permit, Empire Energy said yesterday.

Rough Range would increase its interest in EP 412 from 35% to 80%, after acquiring an additional 45% from Bounty Oil & Gas.

After the well is drilled, the partners and their interests in the permit will be: Rough Range Oil (55%), Australian Oil Company (25%) and Bounty Oil & Gas (20%).

Immediately north of this permit is EP435, in which AOC completed a farm-in deal with Empire in May this year. Under the agreement, AOC will earn a 25% interest in the onshore Carnarvon Basin permit, by funding 50% of the upcoming Dune-1 exploration well costs.

Drilling of Dune-1 is scheduled for early next year, following final environmental approvals and construction of an access road and well-site, Empire said. The well is designed to test the seismically mapped Dune horst block structure on the Bullara Trend.

Empire is currently settling a rig contract to drill Dune-1, as well as five optional wells.

Permit EP435 also contains the Parrot Hill and Roberts Hill oil discoveries and three untested prospects. The Rough Range oil field production licence is also within the permit but excluded from the farm-in deal.

Empire's mapping suggests the structures on this Bullara Trend extend throughout the company's EP 435, EP 412 and EP 359 permits. This Trend is estimated to contain between two and 10 million barrels of potential recoverable oil reserves.

“Seismically defined structures on this Trend are considered to have been formed prior to primary oil generation and migration from the Paterson Trough and prior to the formation of the Rough Range Anticline," Empire managing director Craig Marshall said.

“If this is proved to be correct then there will be a new oil trend, the Bullara Trend, with follow-up wells in EP 435 and in both the EP 412 and EP 359 Permits.”