"Xyris 1 is the second of the gas exploration wells being drilled in our regional gas exploration program. It will test a geological structure which is well defined by 3D seismic and is structurally similar to the nearby Mondarra Gasfield," said ARC managing director Eric Streitberg.

The well is located 6.5 kilometres east of the Hovea Production Facility with the prognosed top of the primary objective Dongara Sandstone at approximately 2,700 metres measured depth. The proposed total depth of the well is 2,750 metres measured depth and it is expected to take 18 days to drill on a dry hole basis. Arc will drill the well vertically.

"A success at Xyris would allow us to quickly add value to our overall gas business and would also give confidence in regard to the prospectivity of the other similar structures in the vicinity," added Streitberg.

At the completion of Xyris 1, the Century 11 rig will drill the Jingemia 4 oil development/appraisal well in the EP 413 (Jingemia) Permit."

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