Beach said today it was exercising its farmin option to fully fund the well in the south-west portion of PEL 106. The well will target the more oil-prone portion of the Southwest Patchawarra Trough, an area of the Cooper Basin where Beach previously had success with its Christies and Sellicks discoveries.

Great Artesian managing director Ray Shaw said this move showed the company’s blocks were considered by its peers to be highly prospective.

“Coming on the back of negotiations for a pipeline tie-in of the company’s Smegsy-1 new gas discovery, this will certainly be a fillip to our exploration efforts within PEL 106,” Shaw said.

Although Beach has no direct participatory interest in the permit, it will earn a 50% interest in the event of a commercial discovery.

While Great Artesian holds a 100% stake in PEL 106 and its other permits, it now has a policy of not drilling any wells with 100% interest.

"Having 100% interest doesn't win twice the market kudos that 50% does," Shaw told EnergyReview.net late last year.

"It's worth getting farmin partners and dropping down to anywhere between 30 and 75%. You're no worse off with investors."

Great Artesian farms out on a prospect-by-prospect basis on the basis of no discovery, no earn.

"We don't want large unwieldy JV groups," Shaw said.

"Partners can lose interest after a few dry wells and that can make future progress difficult. Doing it this way is flexible for both parties."