In a statement on Friday, Essential managing director John Remfrey said his company has long been aware of the undiscovered potential of the area and so had “waited patiently” for the opportunity to bid on this block.

“The permit has an extensive, modern 3D seismic data coverage, obviating the need for any more seismic acquisition prior to drilling,” he said.

“Essential has identified from seismic, several untested prospects exhibiting the same direct hydrocarbon indicators as many of the nearby producing fields.

“This substantially increases our chances of making an early discovery.”

The joint venture, in which Essential and Inland Oil each hold a half stake, planned to drill the first of several wells proposed for the permit in the third quarter of this year.

Under the work program, the partners have agreed to drill at least two wells in the next three years, with one more committed for the following two years.

Essential described PEP 168 as a highly prospective permit covering the onshore part of the Pecten High trend, which hosts more than 400 billion cubic feet of reported gas reserves in Waarre reservoir sands in the offshore Casino, Henry, Martha and Halladale fields.

Gas fields in the Port Campbell embayment region include the McIntee, Naylor, North Paaratte and Iona fields.

This is the first time the permit has been offered by the Victorian Government since the initial discoveries were made in the early 1990s.

A commercial discovery in any one of the identified prospects will enhance the potential of the Waarre play within the permit, according to Essential.

“The excellent infrastructure and access to markets for any western Victorian gas discovery enhances the project’s chance of commercial viability, rapid development and early reward,” the company said.