The junior explorer yesterday said the well would be drilled to 17,700 feet (5395m) in the prolific Tuscaloosa trend in central Louisiana. It will target thick Tuscaloosa sands that offset an existing well drilled in the early 1980s, believed to have 125ft of bypassed gas.

Atocha is updip in the trend, which has produced over 2.5 trillion cubic feet (Tcf) of natural gas to date.

Pryme said the primary objective, the Tuscaloosa, is targeted at about 17,500ft with additional secondary Lower Cretaceous targets as deep as 22,000ft. Prospective reserves for the project exceed 1Tcf.

The said it company has signed an agreement with Amelia Resources to develop the prospect. Under the deal, Amelia will earn a prospect fee of $US75,000 and a 3% overriding royalty success fee.

All other costs relating to the project are heads up and on a ground-floor basis for Pryme, it said. Each well is expected to cost between $US6 million and $7 million to drill.

Pryme said its strategy will be to farm the prospect out to a third party in order to reduce its financial exposure and recover 100% of the prospect capital costs, leasing and seismic costs as well as Amelia’s prospect fee plus a small cash fee.

The company said it also hopes to secure a 10% carried working interest through to production of the first well and a 15% reversionary working interest after payout of the well.

The result would be a 25% carried working interest and free look at prospective reserves exceeding 1Tcf in size in the project if it is successful.