"The Cooper Basin has given Stuart a strong production base and profitable cashflow," Guglielmo told the Excellence in Oil & Gas Conference in Sydney on Monday morning.

"It will form a strong productive base for years to come, but the company is now looking at new growth opportunities."

These opportunities include prospects that could deliver 10 to 30 million barrels net to Stuart reserves, as well as the company's diesel importation scheme, the Port Bonython Fuels project.

The company expects to spud a high-impact exploration well in September in an offshore Gippsland permit, Vic P/53, which holds Bazzard, a 10 square kilometre prospect with a 60m vertical closure.

"Bazzard has a mean, unrisked potential of 50 million-plus barrels of oil in two high-quality sands," Guglielmo said.

The Esso-BHP joint venture relinquished the acreage years ago, before the advent of 3D seismic, and Stuart had used 3D and modern depth conversion techniques to better map the permit, according to Guglielmo.

"Mapping is ongoing and we are finding some very interesting and attractive leads," he said.

Stuart farmed into the permit. It is earning a 50% stake and has taken operatorship.

"We prefer to be the operator in our exploration and production projects as its gives us more control," Guglielmo said.

"Stuart has an excellent reputation as an operator, both in OH&S and quality terms."

Vic P/53 is only the first of the company's permits outside the Cooper, according to Guglielmo. Stuart is now also looking at prospects in Angola, West Africa, and has prequalified for that country's next exploration bidding round.

In addition to its exploration and production assets, the company is also moving to develop another business opportunity, the Port Bonython Fuels project, which is being undertaken in partnership with South Australia's Scott's Transport Group.

"Our joint venture with Scott's is a once-only opportunity to supply fuel to the mining boom in South Australia," Guglielmo said.

"Every year since the closure of Port Stanvac [refinery] farms in South Australia run out of diesel at crucial times. This problem is only going to get worse - growth in the South Australian market can't be adequately served from fuels delivered into Adelaide."

Stuart's plan to ship diesel to Port Bonython, a deepwater port in the Spencer Gulf 25km northeast of the steel city of Whyalla, has not only won the backing of Scott's, South Australia's largest transport group, but also the support of the state government, which has given the project Crown-sponsored development status.

Guglielmo says the facility will be able to import 500 million litres of diesel a year. The project is expected to provide long-term, stable cash flows, offsetting volatility in the upstream business.

However, Guglielmo said Stuart's production was much less volatile than that of many other companies and this enabled the company to increase net profit after tax by 21% to 7.5 million in the last year.

"The Cooper is a very low-risk, highly reliable platform for Stuart," he said.

The company drilled seven wells in the last year - five exploration and two development - and four of these were successful, according to Guglielmo.

The company now has 2.9 million barrels in reserves, up 12.5% from the previous year, and is expecting to produce about 600,000 barrels this year.

"All our reserves and production have been built via the drill bit," he said.

"Our first and only capital raising was in 1998 when we floated."

Stuart has stakes in five Cooper licences and 10 discoveries in production. It expects to begin a three-well exploration drilling program this week, drilling Chester-1, Subzero-1 and Brew-1 in the PEL 113 permit.

The company has 100% in Chester and Brew and 65% in Subzero. Assuming hydrocarbons are in place, Chester has a probabilistic resource of 0.8MMbbl of oil, Subzero is likely to hold 1.4MMbl, and Brew probably has about 0.5MMbbl and 17.5 billion cubic feet of gas, a commodity that Stuart has shown little interest in to date.

"We have concentrated on oil, but our permits have gas commercialization potential and we are poised to take advantage of this as infrastructure developments allow," Guglielmo said.