The Melbourne-based company in October finalised an agreement with Blackreef Oil to farm-in to the JV area, which covers about 374 square kilometres and is in the northeast sector of production licence L6 in permit EP129.

The acreage is northeast of and close to the Blina, Sundown and West Terrace oil fields, it said.

Oil Basins has a 35% interest in Blackreef's prospect in the project, while operator Terrateck Oil Tools, which is owned by Golden Dynasty Resources, has a 30% interest and Blackreef Oil, 35%.

The company today said it has decided to extend an option agreement with partner Blackreef Oil for a further 15% interest in the project.

Oil Basins said the option, which was open until December 31, has now been extended to March 31. Total cost of both the initial option and its extension was $15,000.

Carrying out the option would see Oil Basins earn a 50% interest in the onshore Canning Basin JV area, pushing Blackreef's interest down to 20%.

If Oil Basin takes up the interest increase, it would be obligated to fund another $450,000 to the drilling of Black Reef Play prospect.