Great Artesian, which has historically tended to opt for farm-outs, will fully fund its 60% interest in the two wells – Ballaparudda-1 and Murrippi-1 – estimated at $840,000 net to the company per well.

“The company’s choice not to farm-out these wells reflects a strategic decision to retain more equity, the favourable assessment of the prospectivity in this area, the potential for oil and the current oil price,” said managing director Andy Carroll.

“We are confident of oil being found in what we believe is an ‘oil fairway’ in this section of PEL 91, due to the significant oil fields to the south and oil discoveries to the north.”

Oil fields in this part of the South Australian Cooper Basin, include the Sellicks, Christies, Silver Sands and Callawonga fields to the south in adjacent PEL 92 (also operated by Beach Petroleum) and the Growler and Wirraway discoveries to the north in adjacent PEL 104, operated by Victoria Petroleum.

VicPet has been very vocal in arguing for the concept of a new Jurassic oil fairway on the western flank of the Patchawarra Trough. But that company’s last Western Margin Oil Project well, Ascender-1, was dry, and Carroll sounded a note of caution about Great Artesian’s upcoming exploration wells.

“It should be noted that experience in the adjacent permits has shown that each prospect has its own independent risk and that not every structure in the ‘fairway’ is filled with oil,” he said.

However, when the dice fall well the results can be very material for junior companies.

Recent development wells in the Callawonga oil field, held by Beach and Cooper Energy, have delivered flow rates of around 5000 barrels of oil per day.

The PEL 92 Joint Venture is now fast-tracking a new pipeline that will connect Callawonga to Port Bonython, eliminating the need for trucking.

Great Artesian said drilling would begin on Ballaparudda-1 when the Hunt Rig-2 completed drilling in nearby PEL 92. Murrippi-1 will be drilled early in 2008 after a planned break in drilling over the holiday period.

Ballaparudda-1 is about 20km north of Sellicks and 19km southwest of the Growler discovery. Primary targets are the Namur Sandstone, Birkhead Formation and Hutton sandstone, with secondary targets in the Poolowanna and Kalladeina Formations.

Murrippi-1 is 15km east of Ballaparudda and has dual targets in the Jurassic Namur Sandstone, Birkhead Formation and Hutton sandstone reservoirs and the Permian Patchawarra Formation, with secondary targets in the Poolowanna and Kalladeina Formations.