The Malcolm & Melvin Doyle-2A well is the first well to be drilled and completed by the company since it acquired the project from DMS Partners earlier this month.

A total depth of 366.36m was reached on Monday, after which the company completed wireline logs and undertook a flow-test.

For the first seven hours, the well produced natural gas at a pressure of 300 psi, then began flowing oil to the surface.

Having monitored the flows, the company determined that crude oil pumping equipment would be required.

"The Malcolm & Melvin Doyle-2A natural flow has confirmed the commercial viability of this well as an oil and gas producer," Austin managing director David Schuette said.

"According to the analysis of the electric log, the gas is flowing from two key target zones present in the Park City project area, the New Albany Shale and the Fort Payne Limestone formation, and the heavy crude oil is apparently coming from a lower zone, a Devonian-aged carbonate named the Corniferous Formation."

Schuette said the well had a higher pressure than expected for a typical well in this field.

"The natural flow of oil to the surface is highly encouraging and one heck of a start for this project," he said.

The company plans to install separator equipment at the pump station, to move the natural gas to the nearby pipeline and the crude oil to the nearby Somerset refinery.

Park City is one of Kentucky's newest commercial gas fields and its processing and gas distribution opportunities have attracted the participation of some major US energy corporations.

Austin has other projects in the US and gas and oil exploration projects in South Australia's Cooper Basin.