BEACH Energy and partner Cooper Energy have spudded the second of two wells targeting the Casterton Formation within the Penola Trough of the onshore Otway basin in South Australia.

The Bungaloo-1 reached a depth of 617 metres in the Eumeralla Formation, Cooper Energy said.

Bungaloo-1 will, like the preceding well Jolly-1, has the primary objective of assessing the oil and gas potential of shales within the Casterton Formation.

Bungaloo-1 is expected to be drilled to a total depth of 3,677 metres and collect more than 100 metres of conventional core.

The well will also assess the sands of the Lower Sawpit which were gas-bearing in Jolly-1. It is anticipated that Bungaloo-1 will intersect the Casterton Formation approximately 500m shallower than Jolly-1, which was drilled to a total depth of 4,026m in April 2014.

Bungaloo-1 is located in permit PEL 494, 14 km north-west of Jolly-1.

The drilling and completion of Bungaloo-1 will conclude the current drilling program in the Otway basin.

Cooper Energy has a 30 per cent interest in the Otway venture while Beach Energy, as operator, holds the remaining majority stake.