The Queensland company said the well had also deepened the lowest known oil level by 11m and increased the confirmed field length by about 3km, up from 2km previously.

Wireline log analysis has indicated three oil saturated sandstone units were penetrated in the Patchawarra Formation, of 4.3m, 5m and 7.1m thickness.

The 7.1m zone was immediately above the main productive unit, the Tirrawarra Sandstone, which was oil saturated and 18.7m thick of which 11m is classed as net pay.

As a result, the Flax-3 well is being cased for future completion and production, with the rig expected to leave the site tomorrow to spud the next well in the program.

After Flax-4, the company will drill the Flax East-1 exploration well, designed to test the saddle between the Flax and Juniper oil fields.

At the beginning of 2006, an independent team determined Flax had the potential to contain 3.2 million barrels of mean oil reserves.

PEL 103 is Innamincka's main oil and gas permit, which it holds a 75% interest in.