Ambassador Oil and Gas aims to start drilling the second of two oil wells, Kruger 1, in Cooper basin permit PEL 156, this coming weekend. In partnership with Senex Energy, operator of permit PEL 516, Ambassador is currently mobilising the Century 3 drilling rig to the Kruger 1 well site, about 40 km south-east of the Moomba oil and gas processing facility.

The Kruger1 well, the second well in Ambassador's first ever drilling campaign, has a mean recoverable oil potential of 380,000 barrels from the Basal Birkhead/Hutton formations, with an upside potential of over 800,000 barrels of recoverable oil. The Basal Birkhead and Hutton formations are well known and prolific oil producing horizons in the Cooper basin.

The Kruger exploration well is being funded by Ambassador to earn a 60% interest in the PEL 516 Mudlalee block in the South Australian portion of the Cooper basin. Kruger1 will be drilled 600 metres southwest of the existing oil producer, Mudlalee 4. The first success on the Mudlalee field was Mudlalee 3 drilled in 1993. The well flowed oil to surface at over 700 barrels per day from the Hutton sandstone. A 3-Dimensional seismic survey was recorded over the area in 2001. Mudlalee 4 drilled in 2007, discovered a separate oil accumulation to the north of Mudlalee 3. Mudlalee 4 has produced over 200,000 barrels of oil. Kruger 1 is interpreted as either a separate oil pool or a south westerly extension of the Mudlalee 4 oil accumulation.

If successful, the Kruger 1 well can be brought into production quickly via a stand-alone modular production facility with the oil produced and trucked to the nearest truck unloading facility operated by Santos in Dullingari or Moomba subject to satisfactory commercial arrangements.