Spudded yesterday, Armstrong-1 at 6am local time today was at a depth of 248m and waiting on cement to set prior to rigging up the Blow-Out Preventer for drilling the 7-7/8 inch hole, the company said.

Armstrong-1 is targeting the Showground Sandstone and Rewan Formation reservoirs and has estimated mean recoverable resources of 470,000 barrels of oil and up to 1.1 million barrels of oil in P10 case.

The well is about 4km east of Taylor-11, which flowed to surface 458bbl of oil and 300,000 cubic feet of gas per day on an open hole drill stem test.

Mosaic said the results of Armstrong-1 would determine if several additional prospects and leads on trend with the Armstrong Prospect would be drilled.

The three most mature prospects have combined total potential mean recoverable resources of 0.7MMbbl of oil and up to 1.6MMbbl of recoverable oil in P10 case, the company added.

The well is expected to reach its total depth of 2360m in about 14 days.

Mosaic has a 100% stake in ATP 709.

Meanwhile, preparation for drilling the Waggamba-5H well in PL 202, in the Surat-Bowen Basin is nearly complete.

Mosaic has received a prepayment of $3.5 million from CS Energy to fund the Waggamba-5H drilling, completion and tie-in costs.

CS Energy will be entitled to 50% of gas production and 35% of free oil and condensate production from the well, while Mosaic will retain 50% of gas production and 65% of free oil and condensate production.