The North America-focused company announced to the Australian Securities Exchange that it had entered into an agreement to increase the project lease area in the Western Canadian sedimentary basin from 17280 acres to 26080 acres.
Petsec has had a 24.5% interest in the project since it signed a farm-in agreement in February. Therefore, its net interest holdings have now increased to 6434 acres.
The company also expects to spud its first horizontal well on the project in late October.
The well will test for oil productivity in the shale oil reservoir then fracture stimulated and completed for production.
“The encouragement we gained from the vertical science well we drilled in the shale oil project area in the second quarter of this year has caused us to acquire further leases and participate in our first horizontal well for shale oil,” Petsec chairman Terry Fern said in a statement.
The company believed the well had the potential to indicate a recoverable resource of between 10 to 15 million barrels of oil within its net acreage.
The cost of Petsec increasing its acreage and participating in the well has been estimated at A$2.9 million (US$3 million).
“We are looking forward to the production completion results which we hope to have achieved early in 2013,” Fern added.
The Western Canadian sedimentary basin is Canada’s largest hydrocarbon producing province, accounting for about 90% of the oil and gas produced within the country. To date, production has exceeded 13.7 billion barrels of oil and 47 trillion cubic feet of natural gas.