The Century Drilling rig will be released to work on Arc Energy's Hovea discovery, which is due to spud this week.
Hardman (75%) and Bounty (25%) said further testing on the potential hydrocarbon bearing sandstone within the basal Irwin River Coal Measures and High Cliff Sandstone would be needed to determine the true formation fluid (oil and/or water) and productivity.
"This test work will now be carried out using a smaller drilling rig or swab test equipment. This work is expected to be undertaken within the next two to four weeks," Hardman told the stock exchange.
Hardman said if the deeper zones tested by the first cased hole test prove to be oil bearing, the well will be completed for oil production. If deeper zones are water bearing, these zones will be cemented and a second cased hole test carried out over gas bearing zones within the Carynginia Limestone to confirm the economic potential for gas production.
The junior explorers said continued recovery of minor amounts of oil while swabbing as well as the technical analysis continue to support the likelihood that the zone tested does contain oil and as a result further testing is warranted.