Austral has a 46% stake in the Salmon prospect and is the operator. The other partner is Canadian company, Tag Oil (54%).

"Salmon is an aerially extensive oil prospect situated over excellent proven reservoir rock with high quality oil and gas being generated directly down dip in the offshore portion of the basin," Tag Oil said.

At the Cardiff-2A gas well, Austral hopes to resume the testing program soon.

"Operations to clear the production tubing have been partially completed, with significant progress, and will be completed next week following the return of the coil tubing unit from a short operation for another operator," the company said.

At Cheal-A3X, production testing is delivering oil at stable rates. More than 16,000 barrels of oil and negligible associated water have been produced since testing of this well started in late May.

Elsewhere in onshore Taranaki, the Supplejack-1 well, targeting a million barrels of oil in PEP 38741, is due to start drilling on or about July 20, Austral Pacific said.

The ODE 19 rig will be used to drill to a target depth of 2600m to test targets at Urenui and Moki levels defined by the Kaimata 3D seismic survey. Interests in this permit are: Austral (operator) 30%, Tap Oil 50% and Tag Oil 20%.

Meanwhile, Austral Pacific has extended 600,000 previously granted management incentive options for two years until July 6, 2007.

The option exercise price of these options has been re-priced upwards from US$1 to US$1.10 and US$1.20 each year over the two year extension period. The extension was made in conjunction with, and subject to, an application for an upgrade of the company's listing on the TSX Venture Exchange from Tier 2 to Tier 1 status.