Robert L. Bayless and Tom Dugan were oilpatch veterans in Farmington, N.M., and have been active throughout the Rocky Mountains in the United States. They focused their attention in the San Juan Basin of northwestern New Mexico, but they were willing to take a good look at Australia.

Bayless has passed away, but his family is still involved in Sweetpea Petroleum, and Dugan is president of the company that has collected the exploration and production rights to the Beetaloo Basin in Australia's Northern Territory south-southeast of Darwin and north of Alice Springs.

Bill Peabody, a geologist who lived in New Mexico but who had experience in Australia, brought them the prospect in the early 1990s, according to Matthew R. Silverman, exploration manager. Through negotiations with government entities and aboriginal Australians, they assembled the four permits that cover 7 million acres, or nearly the entire basin.

The prospective area wasn't entirely unfamiliar, Silverman said; one lead resembles the prolific Nessen Anticline near Williston, N.D. By that, he meant it has some large structural features with four-way closures and a thick marine sedimentary column.

For example, individual untested closures have been measured at 28 miles (45 km) long.

If the company does find successful production in the oil-prone area, he said, it could be the oldest oil yet produced in the world. The Pre-Cambrian-sourced oil would be older than production from the Arakan Peninsula in Oman and from Eastern Siberia.

That doesn't necessarily mean it's overcooked.

"It's a very stable basin, not too deep, fairly cool. Probably the upper 3,000 m (9,843 ft) are prospective," Silverman said.

One source rock is the Kyalla Shale, with up to 820 ft (250 m) of oil-prone organic matter with 2% to 3% total oil content and generally mature. The other source is the Middle Velkerri Shale, up to 459 ft (140 m) thick, with organically rich shale in the McManus #1 well. Total oil content is up to 12% but typically 4% to 6%, and the shale is generally mature.

Potential production would come from the Jamison Sandstone, between 250 ft and 525 ft (75 m and 160 m) thick, with 8% to 15% porosity and possible fracture-enhanced permeability. The Jamison #1 well had excellent oil shows, Silverman said.

The Moroak Sandstone is up to 1,000 ft (300 m) thick. Porosity is 8% to 14%.

The company's structure maps show structural leads and free oil shows in the Jamison and Moroak. In all, the basin holds 10 strong leads defined by seismic and one by gravity exploration.

Analogs show a potential for the basin of hundreds of millions of barrels of oil reserves and trillions of cubic feet of natural gas - the gas coming mainly from the center of the basin - he added.

If the company can find a partner to share part of the exploration bill to refine the existing seismic leads, and if exploration is successful, getting product to market shouldn't be a major problem. A paved highway runs through the property to Darwin 372 miles (600 km) to the north, and two gas lines run through the property to Darwin from producing fields in the Amadeus Basin south and west of Alice Springs.

The company has 5 years on its permits for the basin, and 2005 is the first year. Silverman would like to conduct additional seismic this year and drill in 2006 and 2007.

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