The Perth-based company, which is being carried by Nahabedian Exploration, said it will have a 5% interest in the back-to-back, six-well drilling program.

The target of the drilling program is the Kreyenhagen oil field, which has the potential to contain 40 million barrels of recoverable oil at relatively shallow depths of 300-1000 feet (91.4-304.8m).

Nuenco said historical production in the oil field, discovered in the 1890s, was limited due to the shallow formation depth and consequent low reservoir energy.

The current Kreyenhagen project team believes the oil field could be developed using shallow vertical and long reach horizontal wells, combined with cyclic steam injection.

“The aim of this drilling program is to define the field size and understand the reservoir properties better in order to evaluate its commercial potential,” Nuenco managing director Anthony Kain said.

“The Kreyenhagen oil field project is a very important strategic step forward for Nuenco and vindicates its early capital investment and enthusiasm for exploration in the San Joaquin Basin, California.”