The company announced last October that it would drill the well as part of its farm-in agreement with Central Petroleum, and carry its joint venture partner to earn a 70% participating interest in the permit.

Late last week Santos said the well had encountered the Gillen Formation and cemented surface casing in place.

Low background gas levels were observed while drilling through the formation which the joint venture believes could be an indication of the efficacy of the salt as a regional seal.

The forward plan will be to drill out the shoe track and perform a leak off test before drilling ahead to the lower Gillen Formation.

Santos expects to drill through the formation to the target Heavitree Formation within the next fortnight.

The basement below Heavitree is a secondary target and is planned to be evaluated as well.

The prospect was first delineated with seismic in 2013, with further data acquisition in 2017, and last year. 

Central has previously suggested the prospect could contain several trillion cubic feet of gas, given two other wells in the basin, Magee-1 and Mt Kitty-1, have already shown a hydrocarbon system present.

The onshore Ensign 965 rig is being used to drill the well to a depth of 3,600 metres.

On completion of the well Central will retain a 30% stake in EP112 and Santos will hold the remaining interest.

Notably the Dukas prospect also holds massive helium resources worth around 10 times the gas price due to its scarcity.

Within EP112 the percentage of helium recovered in known discoveries is in the range 4% to 9%, which is very high compared with worldwide analogues, and may represent a standalone commercial opportunity.

On Friday Santos shares were worth $6.79 per share. Central last traded at 13.5 cents per share.