Twenty-four hours later, the Century 18 Rig was drilling the well ahead at a depth of 115m in a 444mm diameter hole.

Valentine-1, about 20km north of the Derby township in northwest Australia, could yield up to 1 trillion cubic feet of gas plus 200 million barrels of oil.

A discovery of this size would transform all the companies involved, especially junior partners Empire Oil & Gas, First Australian Resources, Pancontinental Petroleum and Emerald Oil & Gas.

Primarily the well is targeting the Late Devonian aged Virgin Hills Formation, as well as carbonates near the prospect’s structural crest.

It will be deviated to 800m to accommodate the planned sidetracking operations required to drill the Stokes Bay-1 well.

After this, Valentine-1 will be drilled vertically to the top of the main objective section at a depth of 3220m.

Stokes Bay-1 is planned as a test of the extent and reservoir development of the gas accumulation intersected by the Point Torment 1 well, and will be drilled as a deviated well with a total depth of 2500m.

Drilled in 1992, Point Torment-1 flowed gas at a rate of up to 4.3 million cubic feet of gas per day from the Carboniferous aged Anderson Formation sandstones.

Subsequent tests of these sands produced ambiguous information on potential volumes and reservoir quality.

Post farm-in, interests in the Valentine-1 well will be: Arc Energy (operator – 38.95%), Emerald (12.75%), Pancontinental (10%) Phoenix Resources (10%),

First Australian Resources (8%) and Indigo Oil (5.5%).