Since listing in 2005, the company's original asset, the Selmo oil field in West Turkey, has continued to produce at about 500,000 barrels a year with limited depletion.

This provides tremendous ongoing cash flow and has scope to be increased with further drilling, McGann said.

Incremental has also made strong gas discoveries in partnership with another Perth junior, Otto Energy. It is expecting first production from these fields next year.

The success in Turkey has allowed the company to diversify geographically and Incremental has just concluded a deal to acquire a strategic stake in the large Kettleman Middle Dome oil field in California

McGann said Incremental was excited about the opportunity in California.

"Sizable oil and gas targets have remained undeveloped due to many majors leaving this productive area in the 1970s, plus the perceived difficult environmental regulatory regime in California," he said.

The Kettleman Middle Dome has only been produced sporadically in the 1930s and 1950s, having been plagued by infighting between various acreage holders and lack of an export pipeline.

Now that Incremental's US partners have resolved these issues, significant production from new wells at the field will start later this year, McGann said.

He emphasised that Incremental Petroleum is profitable and pays a dividend, and said the company currently has $A11.7 million in cash and receivables having settled the acquisition costs of its US assets.

The cost of the development program for the next two years will be about $A20 million and will be fully funded by Incremental's recent placement, hydrocarbon production proceeds and internal cash flow, McGann said.