Central today said the new permit, which still needs to be approved by the Northern Territory Government, surrounds the Mereenie oil and gas field and holds a “significant number” of prospects and leads.

One such oil prospect, known as Johnstone, has been independently estimated to contain up to a potential 320 million barrels of oil in place in a three-way dip and fault sealed closure covering a 55-sq.km area.

Central said it plans to drill Johnstone once it has acquired and assessed some additional pre-drilling seismic. The main reservoir, known as the Pacoota Sandstone, is estimated to be only 1700m beneath the surface.

“There has been little activity in this area since the mid 1980s when Magellan operated part of the area,” managing director John Heugh said.

Recently assessed data by the Northern Territory Geological Survey (NTGS) and Young Consultants concluded the Pacoota Sandstone has similar porosity and permeability to the same formation in the Mereenie field to the east.

In addition, the prognosed oil source, the Horn Valley Siltstone, was determined to be richer and more oil prone in this vicinity than at Mereenie.

A recent ASTER and aerial structural analysis on the Johnstone Prospect by Richard Russell and AGARSS concluded that 19 distinct zones showed colour anomalies often associated with hydrocarbon seepage.

As well as Johnstone, the EPA 115 permit hosts the Gypsum, Watson Range, Glen Edith, Cleland, Tarawarra, Johnstone North and other prospects and leads, most of which are regarded as oil targets.