The block's owner, Eneabba Gas, is a would-be power station developer that has dabbled in some coal and gas exploration over the past decade. The company started making moves into the petroleum sector proper recently, with an unsuccessful bid on four offshore blocks in mid-2014.

Its 168 megawatt Centauri-1 power station project is on the backburner as the local market is over-supplied and it makes little sense to pursue a power station in the current environment - at least until the Mid-West mining industry expands.

Last year Eneabba agreed to take responsibility for the block from Green Rock Energy, a geothermal explorer turned unsuccessful Canning Basin oil hunter that is now seeking to make its fortune in graphite.

To beat out other bidders in 2012, such as AWE, Green Rock pledged a significant work program with the hope of completing a successful farm-out of the undeveloped gas discovery with a cashed up explorer willing to fund operations, but since lost the stomach for oil and gas.

Eneabba, which isn't exactly cashed-up, has in turn managed to convince the privately-owned Finder to fund the $A15 million in work commitments needed over the 297 square kilometre block in 2015 and 2016.

Earn-in

Finder will earn up to an 85% interest in Ocean Hill, subject to the successful licence grant and variation of the permit conditions to match the agreed work program.

The planned first stage of the project is the drilling and testing of an offset well to Ocean Hill-1 that flowed gas to surface.

Finder has the option of walking away at the end of year one after it has spent $10 million, or it can choose to fund the acquisition of a 250sq.km 3D seismic survey to better image the subsurface structures.

Ocean Hill is mapped on a reasonable quality 2D data grid as a large rollover structure on the east-west seismic, but the few lines running north-south are not as good so there is considerable uncertainty about the ultimate size of the northern and southern lobes.

The seismic may define a more complicated structuring similar to that seen in the nearby Walyering field, and the containers may be smaller than expected.

Finder will also pay Eneabba back costs of $540,750, with half of that due when Ocean Hill-2 spuds, which is a much better deal than what it successfully offered to Green Rock: $330,000 in cash, the issue of 40 million new shares and the provision of up to $75,000 for native title costs.

Discovery

Ocean Hill-1 sits within STP-EPA 0090 on the Parmelia pipeline route between the Woodada and Warro fields.

The discovery, made by Sagasco and Arrow Petroleum in 1991, discovered 800 metres of gross gas shows across the Jurassic Cattamarra Coal Measures and Cadda Formation, different to the bulk of the Permian production to the west and now believed to be of a similar play to Empire Oil & Gas' Red Gully and Gingin West fields.

At the time Sagasco calculated more than 100m of net pay.

The well was tested at around 700,000 cubic feet per day with associated liquids of 15-120 barrels per million cubic feet for the Jurassic sands.

That's not a great rate, but it's a strong enough gas flow to demand attention in the modern pricing environment.

Other zones were tested but the gas rates were generally too small to measure.

The major risk for the field is reservoir quality; however, it may be that drilling practices of the day damaged the reservoir.

Sagasco sole-risked a decision to case the well and undertook a further program with minimal success. The re-test of the Jurassic section flowed at only 300mcfpd, but it may be that cementing the casing impaired flow rates.

By drilling underbalanced, as Empire did at Red Gully, there is a good chance the zones will flow at commercial rates.

Remapping by Green Rock shows a large structure that could host 360 billion cubic feet and around 1.2mmbbl condensate of gross 2C contingent resources in the northern lobe, although the upside could be 2.5mmbbl and almost 800bcf of gas in the wider Ocean Hill structure.

With other poorly imaged leads mapped to date, there could be one trillion cubic feet of gas sitting right under a working pipeline and there is a compressor station just outside the block.

A 3mmcfpd flow from one zone should be sufficient to underwrite the development, from reserves as little as around 30Bcf.

Ocean Hill is largely covered with farms and 80% of the land is cleared, so native title with the Yued and Amangu people is really the major hurdle to getting the block awarded.

Eneabba is also looking at other opportunities in the Perth Basin, with a number of small unfunded explorers having assets and Empire looking for partners.

Finder is also planning its inaugural onshore Canning Basin well, Theia-1, at some stage in the second quarter targeting what it believes are the best liquids-rich Ordovician Goldwyer shale rocks in the basin.

The low-cost DDH-1 Drilling Rig 31 has already been secured for the well.

Offshore, the company intends to participate in the Roc-1 exploration well in the Bedout Sub-basin with Apache Energy and Carnarvon Petroleum to follow-up the exciting Phoenix South-1 oil discovery. A well is also planned for the Hyde prospect on the Rankin Trend early in 2016.

Finder previously held SPA-016 AO around Lancelin, but sold that block to Norwest Energy which is focused on the Cataby oil trend.