May’s problems with the pump continued to affect production several weeks later.

But Stuart said yesterday it was on track to achieve its previous financial year output forecast of 800,000 to 850,000 barrels after output for the first 11 months was 780,000 barrels.

The company has hedged 45,000 barrels a month around A$40 a barrel in the past year.

Managing director Tino Guglielmo said by the end of this month the hedge volume would reduce to 21,000 barrels per month, significantly increasing the oil production cash margin.

Stuart's oil production and cash generation has been strong in the last six months and has provided some offset to recent dusters at Baystone, Beeville and Jezabeel, Guglielmo said.

A development well on the successful Derrilyn oil field, operated by Santos, will be highlight of Stuart Petroleum's 12-month, 14-well drilling campaign about to start in the basin.

Drilling starts in the first week of July with Acrasia 4, a development well designed to extract oil at a faster rate from the Acrasia field, Stuart's first discovery in the Cooper Basin.

Derrilyn-2 will be drilled in August on the field 35% owned by Stuart and still capable of producing 2000 bopd after being discovered a year ago.

Derrilyn-2 will target the Hutton Formation and both the McKinlay and Murta zones.

The year-long program, starting in October, will be Stuart’s largest in its five-year history.

It will include the targeting of an expected reserve of 1.5 to 2 million barrels of oil and about 100 bcf of gas.