The deal with Cooper Energy will also see VicPet fund 33.33% of the completion costs in the event of an oil discovery and a decision to complete the well for production.
Eucalyptus-1 will be drilled by Cooper Energy as operator of PEL 88 under a farmin agreement it has with Liberty Petroleum Corporation, an unlisted US based company.
Under its agreement with Liberty, Cooper Energy is earning a 40% interest in PEL 88 and will therefore reduce to 30% following the drilling of the well and the cost contribution by VicPet.
Eucalyptus-1 is being drilled on a well defined anticlinal trap located in the northern portion of the Patchawarra Trough of the Cooper Basin.
The primary objectives of the well are the Poolowanna and Tinchoo Formations which are productive in the Keleary/Telopea Fields, 45 km south west of the Eucalyptus location.
The Tinchoo Formation flowed a combined 3,210bopd from separate tests of two sands within this formation in the James-1 well, drilled in 1988 some 14 km to the west.
Cooper Energy has assessed the Eucalyptus structure to have potential mean recoverable oil reserves of 2.9 million barrels.
Following the drilling of the well, the interests in PEL 88 will be, Cooper Energy NL (operator) 30%, Victoria Oil Exploration (1977) 10% and Liberty Petroleum Corporation 60%.