Bringing the Jingemia-8, Hovea-12 and Eremia-6 development wells online also helped push Arc’s total sales revenue up by $1 million to $29.9 million.

Cash on hand increased by $1 million to $57 million, after Arc spent $17 million on exploration and development activities in the quarter.

Managing director Eric Streitberg said he pleased with Arc’s “robust” results, coming despite a 22% drop in the oil price during the December quarter.

“The soon-to-commence exploration drilling in Yemen and the Canning Basin will be the first steps in Arc’s planned diversification program, while ensuring the Perth Basin heartland business continues to deliver strong cash flow and profit,” he said.

“This exploration activity, combined with the 2007 Perth Basin exploration drilling program both onshore and offshore, provides the company with a potentially very high impact exploration program across a diverse range of quality prospects.

“Furthermore, the company is well-placed to commercialise discoveries in any of its areas and has developed the skills to ensure the early and cost-efficient monetisation of any oil and gas it finds.”

Canning Basin

Over the past six months, Arc has also acquired an extensive acreage position in the Canning Basin, which it describes as a “very exciting” upcoming area of focus.

Scheduled for spudding in either April or May, the Stokes Bay-1 well is expected to be the first in up to eight high impact exploration wells planned for the region.

Yemen

Overseas, the company has committed to a two-well drilling program starting in March in Yemen.

“The company continues to review opportunities in Yemen with the intent of increasing its interests in a manner that is consistent with its regional basin-wide focus for exploration targets,” Arc said.

Looking ahead, Arc expects current production levels to hold throughout the remainder of the 2006-07 financial year.