The well is located nine kilometres southwest of the Hovea Production Facility with the prognosed top of the primary objective Dongara Sandstone at 2,300 metres measured depth.

Total depth of the well will be around 2,800m measured depth and the well will test the Dongara Sandstone in a similar structural setting and seven kilometres southeast of the Jingemia Oilfield and will also be deepened to test the High Cliff Sandstone which was gas productive in the Hovea 2 well.

Independent analyst Peter Strachan said Kingia is targeting recoverable oil of up to 25 MMBO, which would have an NPV value of $13/bbl or about 95 cents per ARQ share.

"Success here would have the double significance of adding to confidence for look-a-line deposits. The well should reach its primary target in the Dongara sands by mid next week and will then drill on to test deeper targets, which may be gas bearing. Any discovery could be easily developed using the Hovea facilities just 9km to the north," he said.

ARC has made a name for itself by combining with Origin Energy in the Perth Basin in the development of the Hovea and Eremia fields which have a combined total reserve of over between 15-20 million barrels. It also had a stake in the Cliff Head Oil discovery but has subsequently sold it.

The company recently completed the Hovea 10 injection well and is currently producing 6,000bbls per day from the field.

Participants in L1 and L2 (excluding the Dongara, Mondarra and Yardarino fields) and Kingia 1 are ARC Energy 50% (Operator) and Origin Energy Developments 50%.