The well is designed as a stratigraphic test of the Late Permian Bandanna Formation coals.

Blue Energy said the prospect is believed to be a close analogue to nearby highly productive fields including Santos' Fairview and Origin's Spring Gull.

The company is drilling the well with Mitchell Rig 101 and is the third of five petroleum exploration tenures being evaluated for CSM potential, under a six month drilling program.

Blue Energy started work on its 15-well drilling program last month, after spudding Indigo-2 well in ATP 818P and drilling the Cobalt-1 well in ATP 845P.

Other tenements that will be covered by the program are ATP 814P and ATP 896P.