Stuart managing director Tino Guglielmo said the Cooper had given his company a strong platform for growth but the time had come to introduce some new elements to the firm’s business plan.

“We have an oil exploration and production focus that has given us low-risk growth,” Guglielmo said.

“Stuart had one initial capital raising in the late 90s – the remaining growth has been organic, driven by increasing production and rising oil prices.”

The company now has five exploration licenses and four production licenses. Since listing, Stuart has made five discoveries, each of which has yielded several follow-up drilling opportunities.

But it has chosen to concentrate on its oil discoveries and further oil-focused exploration, undertaking minimal work on its gas prospects.

“We have in excess of 50 gas prospects and are looking forward to higher gas prices in the future, but for now it makes sense to concentrate on our oil prospects,” Guglielmo said.

Looking to grow the company further, Stuart executives are pursuing two new strategies – the development of a $20 million diesel refinery in the Cooper Basin, and a move into overseas exploration.

The diesel refinery would produce up to 100 million litres per year and aim at supplying agriculture and resource sector users in northern South Australia.

“The refinery would value-add via major transport savings and refinery margins,” Guglielmo said.

Stuart had now completed engineering design work and was negotiating commercial agreements, he told the conference.

But to grow further, Stuart also needed to target larger oil prospects.

“The Cooper is replete with low risk, low yield opportunities, but to step up to the next level we need to look outside the Cooper,” he said.

“We are currently looking for niche opportunities overseas.”

Guglielmo declined to name the parts of the world that Stuart was evaluating, saying that the opportunities were still contestable.

Speaking immediately after Guglielmo, Great Artesian managing director Ray Shaw said that in contrast to Stuart, gas was an integral part of his company’s growth strategy.

“Oil gives a good production spike initially but oil fields deplete rapidly,” Shaw said.

“In the medium and long term, gas underpins substantial growth.”

Therefore, Great Artesian had a dual commodity strategy that combined both types of hydrocarbons – oil for short-term market recognition and a quick start to strong cashflows, and gas for sustained growth.

“We are looking for growth from what could be a significant new gas and condensate province in the Cooper,” Shaw said.

On the basis of existing seismic coverage, over 30 prospects and leads have been identified by Great Artesian within its PEL 106 permit.

These prospects are expected to contain gas and condensate in the eastern and central portion of the Permit where the geological section is thickest.

With a historical exploration drilling discovery rate of more than 70%, multiple discoveries can be reasonably expected from the seven well program to be undertaken during the first three permit years, according to Shaw.

Great Artesian’s discoveries in this area include Paranta-1 and Smegsy-1, both in 2004 and Rossco-1 in 2005. But it was two discoveries made this year that most excite the company.

In January Great Artesian and farm-in partner Beach Petroleum drilled Udacha-1 in PEL 91, followed shortly after by the Middleton-1 well drilled in PEL 106 in late February and early March.

Udacha encountered several interpreted gas-bearing zones, which will be retested later in 2006, while Middleton intersected several sandstone reservoir zones interpreted to contain hydrocarbons, including one which flowed 11.8 million cubic feet of gas per day, a record gas flow for this part of the Cooper.

“It has created quite a degree of industry interest, lying some 6km northwest of the Raven gas field which is operated by Santos,” Shaw said.

“Purportedly containing some 80bcf of gas, the Raven-1 well flowed at the previous record rate of approximately 10 million cubic feet per day.”

Great Artesian believes its Middleton and Udacha gas finds in PEL 106 could be significant discoveries whose size would make them very profitable despite current low gas prices.

In both cases, the possibility that the gas may extend beyond the limit of the seismically defined trap is being considered. Such ‘stratigraphic trapping’ is known to occur at Raven.

Great Artesian was also interested in high risk, high reward opportunities outside the Cooper but was not looking overseas at this stage, according to Shaw.

“We have a blue sky, potential company-making opportunity in our sole offshore block, EPP 27 offshore Otway Basin, South Australia” he said.

The offshore Otway Basin has a number of prospects and leads that could hold several hundred billion cubic feet of gas and associated liquids or hundreds of millions of barrels of oil, according to Shaw.

In February 2006 Great Artesian concluded negotiations for a farmout involving Oilex NL and two major Indian companies, Videocon and Gujarat State Oil.

The terms of the farm-out will see both seismic and a well being fully funded by these farminees. Seismic acquisition is likely during mid 2006 with a well being drilled during 2007.

Following the initial seismic and drilling Great Artesian will retain a 40% in EPP 27.