OIL BASINS Limited will seek to advance two prospects on its EP 487 Derby block for drilling in 2016, the company announced in early March.

But partners Oil Basins and Rey Resources are yet to formally decide where to drill as a debate continues regarding who is the rightful operator of the block.

In an announcement released in early March, Oil Basins said it had identified four drilling locations within the unconventional wet laurel tight basin centred gas (BCG) play presented to shareholders at the end of last year.

Three prospects were delineated in the block, but differentiated by reservoir, thickness and depth of burial, though all had significant potential for condensate production and oil recovery.

An independent assessment conducted by 3D-GEO between November 2015 and February 2016 confirmed a 31.6 per cent increase in gross prospective recoverable P50 resources to 24.6 trillion cubic feet (Tcf) within the eastern onshore portion of the permit.

Together with other mapping, the overall gross prospective potential recoverable P50 resources down to 5,000 metres within the onshore eastern portion of the Derby block is now independently assessed at 28.7 Tcf with 717.7 million barrels of associated condensate, Oil Basins said.

The two proposed well locations will test two different primary reservoir targets belonging to the West Kimberley Laurel BCG Condensate and oil prospect.

Both are situated on Warrwa traditional owner lands in close proximity to the Gibb River Road, though Oil Basins said it expected the local community wuld support drilling.

There was an alternative to drilling a second well if drilling at location 1 was successful, Oil Basins added.

Oil Basins said it would disclose more information over the planned drilling program once the joint venture between it and Rey Resources had approved the Year 2 exploration plan and budget.

Both companies hold a 50 per cent stake in the project, with a decision to approve the plan still to be taken.