Spudded on Thursday, the well is exploring for an oil accumulation in a fault trap north of the Yarrow gas field and west of the Yanpurra-1 well, which was drilled in 1970 and recovered oil on test from the Tirrawarra Sandstone.
Innamincka said the well also had larger implications for PEL 103.
"Apart from the local trap, Yarrow North-1 may have greater significance as a step in the testing for a large combined accumulation encompassing the Yanpurra and Flax-Juniper accumulations," the company said.
In related news, Innamincka said development work was progressing on the Flax oil project, also located within the permit.
The company said it was still on track to bring the Flax-1 well on production in May, following which the other Flax wells would be progressively brought online.
"This startup date is governed by the floodwaters coming down Cooper Creek and over the Innamincka causeway through which the oil tankers have to pass on transit to Moomba," the company said.
"The start of gas injection is scheduled for late June [or] July."