The well is a long shot but Austin is bullish on the potential of the 105 square kilometre prospect, a closed anticline within a horst and graben system near the southern tip of the Yorke Peninsula.

“Independent geological assessment of the PEL 73 licence area estimates a range of potential recovery from 197 million barrels of oil and 78 billion cubic feet of gas to 788 million barrels of oil and 315 billion cubic feet of gas, with the best potential recoverable being 394 million barrels of oil and 157 billion cubic feet of gas,” the company said.

“While this prospect represents drilling in a relatively unexplored area, it is potentially the most significant oil and gas project in Australia in a long time and, should it be successful, will cause a major re-evaluation of the oil and gas prospectivity of onshore Australia.”

The Cambrian-age Stansbury Basin has long been known for its oil shows and for seepages around the South Australian coastline and gulf waters. But it has been neglected by explorers.

In the 1950s, oil found washed up on southwest-facing beaches of the Fleurieu Peninsula and Kangaroo Island prompted exploration on the Yorke Peninsula on the west side of St Vincent Gulf.

Pioneer explorer Reg Sprigg took his company Beach Petroleum to the area in the late 1960s for three wells, one of which – Stansbury West-1 – found traces of gas in a Cambrian-age limestone reservoir.

There was a long gap till the 1990s when two unsuccessful offshore wells (Enchilada-1 and Frijole-1 drilled by Canyon Australia) in St Vincent Gulf saw interest in the region decline again.

But recent magnetic and gravity surveys have indicated a previously unrecognised sub-basin in the offshore St Vincent’s Gulf, which could be the kitchen for petroleum traces found in early wells on Yorke Peninsula.

Subsequently, Austin and its associates delineated the huge Yorketown onshore structure.

“There is undoubted presence of hydrocarbons in the region which has been established over a long period of time,” Austin said yesterday.

“With the use of leading edge technologies surveying over 4 million acres, the company, along with its partners formed the view that the PEL 73 licence area represents a highly prospective oil and gas region.”

Austin itself is a bit of an oddity – a company set up by Indian and American backers that is listed on the Australian Stock Exchange. The company’s principal backers, each holding a 21% stake, are Texas-based oil and gas technologist DMS Exploration and tea, oil and gas group Assam Company, which is listed on the Bombay Stock Exchange.

Austin’s partner in the prospect is DMS. Austin has the right to acquire a one-sixth interest from DMS by paying a third of the cost of the first well.