In its quarterly exploration report on Friday, the Melbourne-based company said the permit’s operator, Beach Petroleum, would apply for a retention licence over the South Australian resource.

It also said plans for an extended oil production test at the site would be prepared.

Killanoola DW-1 flowed 25-30 barrels of oil per day with 10-15% water cut during an extended production test carried out by a previous operator in 1999.

The 1997 Killanoola discovery initially flowed oil to surface unaided at about 300 barrels a day. It was then put on pump at a rate of 100 barrels a day, before the recovery fell to 25 barrels a day whereupon Origin abandoned the effort as uneconomic.

Essential has a 20% interest in PEL 27. The other project partners are Origin Energy, with a 50% interest, and Beach Petroleum, as operator with 30%.

Meanwhile, the company said processing of the OEP06 2D marine seismic survey at its 100%-owned Vic/P50 in offshore Otway Basin is nearly finished and data is likely to be interpreted later this year.

The company also carried out palaeo-geographic reconstruction of the Descartes Prospect in Vic/P46 and Vic/P50 in the September quarter, in which three depositional cycles were identified in the Oligocene fan complex.

“Seismic features characteristic of sandy turbidite sequences were recognised in the uppermost cycle providing encouragement that reservoir sands are present,” Essential said.

“The seismic facies mapping at Descartes has resulted in a revised unrisked possible recoverable resource estimate of 800 million barrels of oil (200MMbbl in VIC/P50).”

The company said it is seeking a six-month suspension and extension of VIC/P50 to allow interpretation of the OEP06 survey and technical appraisal of the Amrit-1 basic well data that is expected to be released in the near future.

Essential hopes to farm-out a substantial interest in VIC/P50 in return for a carried interest in the drilling of a well, it said.

The company said no commercial hydrocarbons were discovered or acquired during the three-month period ended September 30, 2006.