The company holds a 10.4% interest in the permit, but only has to fund 0.64% of the well, which has a total capped cost of US$8 million (A$10.6 million).

Further delays with the Ocean Bounty drilling rig mean Magnolia-1 is now expected to spud by Christmas.

The juniors involved in Magnolia-1 – Bounty, Norwest Energy and Adelphi Energy – say success at this prospect could transform their companies. The Magnolia structure is well defined by 3D seismic and has the potential to hold 60 to 100 million barrels of recoverable oil, say the partners.

The well will be drilled in about 100 metres of water to a planned depth of 3,240 metres.

On a trouble-free basis, the well is expected to take about 20 days to drill. It is expected to reach its primary objective, the Montara Sands, at a 2,700-metre depth within two weeks of spudding.

The secondary objective, the Lower Vulcan and Plover sandstones, will be intersected at about 3,100-metre depth.

The AC/P32 Permit, in the Vulcan sub-basin off the coast of Western Australia, is surrounded by existing oil and gas production and discoveries including Jabiru, Challis, Cassini, Skua, Puffin and Montara.

Norwest and Bounty are both being free-carried to a cap of US$8 million, while Coogee Resources/Ashmore Cartier Pty Ltd will be drilling operator.