Holloman, which will become the operator, has agreed to drill and complete three wells in exchange for a 66.7% working interest in all three permits.

Holloman will carry ACOR in the first three wells. After the third well, ACOR will pay its part of any future exploration performed on the three lease areas.

“The exploration manager is working to try to secure a drilling rig and will make every attempt to drill the first two wells in 2006 on PEL 112, subject to rig availability,” ACOR said.

Holloman is an engineering and construction/services company based in Odessa, Texas, which recently established a petroleum exploration arm. The company also picked up 100% of two Carnarvon Basin permits in the Western Australian offshore awards in March.

ACOR and Holloman are also partners in offshore Gippsland permit, Vic/P60, a shallow-to-deep block in the southeast of the basin.

PELs 108 and 112 cover about 5365 square kilometres and have never been drilled, according to ACOR.

The company contracted South Australia-based Terrex Seismic to run a $US1.1 million ($A1.48 million) seismic survey over PELs 108 and 112 late last year, the data from which was processed by South Australian consultant geophysicist Andy McGee.

The same Terrex/McGee team had worked on the seismic programs for Stuart Petroleum’s Worrior oil field and Beach Petroleum’s Christies oil field that lie, respectively, to the east and south of ACOR’s permits.

Following the seismic acquisition, McGee delineated several leads in ACOR’s permits with similarities to these discoveries.

“The new seismic survey has discovered two large seismograph highs as well as 24 smaller ones,” ACOR said.

“The two large seismograph highs – called C-23 & C-26 – cover a combined area of approximately 5534 acres with excellent closure.”

ACOR said its carried working interest could bring substantial revenue into the company, should any or all of the three wells drilled prove to be commercial. The company’s carried working interest in the first three wells will exclude ACOR from all exploration and completion costs.