After successfully completing the horizontal section of the well, AED is now preparing to rig up the riser.

Due to the limitations of testing equipment and the need to ensure flaring is done safely, the well will be flow tested at a limited rate of 7000 bopd, the company said.

The Puffin-7 well will become the field’s first oil producer.

A detailed reprocessing of the Onnia 3D seismic survey has also started to correlate drilling results from the Puffin-7 and Puffin-9 wells.

The company will reprocess 400 square kilometres of seismic data over the coming months to help calculate reserves for Puffin-7, Puffin-9 and Puffin-8.

AED said it would also use the reprocessed data to select future drilling locations and define exploration opportunities and development scenarios.

In addition, the Melbourne-based company has completed its initial hedging program, under which it will receive $US72 per barrel for the delivery of 1.2 million bbl of oil during 2007 and 2008.

Earlier this year, the company renegotiated its royalty agreement with the previous owner of the tenement, Century Exploration International (CEI), and its related entities. This saw AED grant an over ridding royalty interest (ORRI) to CEI of 1.25% over the field to replace its previous rights to an ORRI over Puffin-9.

Perth-based Norwest Energy also has a 1.25% ORRI in the AC/P22 permit and the Puffin Oil Field (AC/L6).