Co-venturer Aurora said the well could be drilled by mid July, as soon as the rig completes operations on another well and is mobilised to the Kowalik-1H site.

Kowalik-1H will target the upper pay interval that has produced gas and condensate in three wells in adjacent acreage and will have a 6000ft horizontal section.

Aurora also said the joint venture is working towards Kowalik-1H being the first in a sequence of four wells.

In other company news, Aurora said operator Texas Crude Energy is preparing to re-stimulate the deepest 600ft of the horizontal section of the Kennedy-1H well.

"Although stable production of minor gas volumes and 40 barrels per day of condensate were achieved, it is believed that the well will benefit from a larger fracture stimulation with a modified design," Aurora said.

Previous fracture operations have been partially successful.

The refracture is expected to begin within the next 14 days.

Interests in Sugarloaf are Texas Crude Energy (operator with a 41.5% stake), Aurora (20%), Adelphi Energy (20%), Eureka Energy (12.5%) and Empyrean Energy (6%).