Ferguson said Elixir, which has been best known for its interests in the US and France since its inception, had forged ahead of the pack.

"We jumped in early, because we know the guys from AWE," Ferguson said. "We were chatting to them about some other stuff and this popped up, and of course we were interested in looking at it, and so far it is all looking pretty good."

Ferguson said the $10 million deal, with just $1 million paid up-front and five years of staged payments based on production, is a terrific deal for Elixir, which is keen to boost its production.

"We personally know the assets from our past, and there is clearly a bit of movement in the basin with Origin [Energy] selling," he said.

"We see this as a stepping stone into the basin, which is seeing a resurgence in activity levels, and we are pretty interested in what is happening.

"Murphy [Oil] is active around us and ROC [now owned by Fosun International] have had a number of proposals with AWE over the past year or so to increase activity, but I think AWE's own program was more focused in other areas, and they were less keen to do that, but it makes perfect sense for someone like us to come in and push that along."

While Fosun took over ROC primarily for its Chinese interests, and Cliff Head is an anomaly in its portfolio, Energy News understands the diversified Chinese company has no immediate intention to sell its interest in WA-31-L, and prefers to use it as a showpiece for its operating capability.

Elixir also wants to use Cliff Head as a stepping stone to bigger things, probably starting in the Perth Basin, most likely in the onshore area where the Waitsia discovery had reignited interest.

But the immediate focus will be dusting off Fosun's plans, and looking at a combination of workovers, infill wells and other modest improvements for Cliff Head.

"We'll probably start with workovers, looking at fluid levels in the system, and then there are a few small fault blocks on the reprocessed 3D seismic that they think might add another few million barrels, and then there are the more step-out and appraisal type wells," Ferguson said

One of the longer term opportunities is the Mentelle prospect where there were oil shows in the Mentelle-1 well almost 15 years ago.

The thinking is that there could be up-dip potential.

There are also two leads to the south-west which could be drilling targets.

"There is still a bit of possible activity in the production licence," Ferguson said.

He suggested that with Murphy Oil owning the surrounding exploration acreage, things could happen in the next few years.

Ferguson believes that, while wells can be drilled from the Cliff Head A platform, the best option will be to secure a rig and drill vertical exploration-appraisal wells, purely to save costs.

Development would come from the platform.

That's probably a few years off, if it happens, and will depend on a "half reasonable" oil price, Ferguson said.

The cash from Cliff Head will help fund the first Petra well in the US, which could help beef up the company.

"Longer term I think we would like to focus on the Perth Basin, and there are some other opportunities we can have a crack at," Ferguson said.

"The US will tick along, but I don't think it will be our focus in the short-term."

Yesterday Elixir announced it had entered into an option for AWE's 57.5% stake in the Perth Basin's only offshore production asset, which is expected to produce until 2026 without any additional work.

Cliff Head production has declined to around 1500bopd, potentially giving a net Elixir 862bopd, which is a hefty increase from no production today if the deal closes.

Since May 2006 Cliff Head has produced more than 14 million barrels of oil and continues to produce at above originally forecast rates.

Elixir has secured an option over the field until November 30 to conclude due diligence, which can be extended until December 24 with a 10% non-refundable deposit.

Elixir also needs to raise $3 million in funding, for which it is in a trading halt.