Dukas is one of Australia’s largest-known onshore conventional gas prospects.

Central Petroleum said the deal with Santos would see the Brisbane based company retain a 30 per cent stake in the permit which holds the Dukas-1 well.

The deal also sets the ground rules for well costs and Central believes a decision on options by the end of the year.

Central managing director Leon Daveney the target drilling window was not as soon as the company had hoped for but the agreement held out the possibility of Central being “free carried” for $3 million at Dukas.

The potential for Dukas was discovered in 2019 when a well encountered an “exceptionally over-pressurised zone” above the target formation which was considered a positive indication for a working petroleum system.

Central said the structural closure was more than 400 sq km which made it comparable to the Bayu Undan field in the Timor Sea.