Significant oil could be flowing within five years from a huge shale oil deposit in South Australia, regardless of the ultimate size of the resource, an exploration company says.
Brisbane-based company Linc Energy is looking to develop the Arckaringa Basin in South Australia in what could be a transformative project for the area around Coober Pedy, about 1000 kilometres north of Adelaide.
Linc shares closed 51 cents, or 23.6 per cent, higher at $2.67 on Thursday.
The company has received two independent assessments on the size of the resource.
The more optimistic one says it could contain up to 233 billion barrels of oil, and the other suggests it could yield 3.5 billion barrels.
Finalising the ultimate size of the deposit will depend on more drilling to determine at what rate the oil will flow.
Linc chief executive Peter Bond says "either way it's massive", and oil production could start in 18 to 20 months and reach "reasonable" levels within two to three years.
"In four or five years you can have a big commercial operation," he said.
"Once you prove these things up and they start to flow oil, it truly flows like it's hard to imagine."
Mr Bond said the company would then expect to be drilling wells in the field for the next 20 to 30 years.
South Australian Resources and Energy Minister Tom Koutsantonis said the Linc development was evidence of the state's vast natural resources.
"All these (developments) are luck and risk, but what we're seeing up there is a very, very big deposit," he said.
"If it comes off you'll see energy security and independence for Australia for a long time into the future."
Coober Pedy Mayor Steve Baines said the project had the potential to provide a major and long-term economic boost to the area and to local employment.
"They've got to source their labour from somewhere, and a project such as what Linc are proposing would need a huge workforce," Mr Baines said.
The local council has already been involved in talks with the company, and the mayor said they would continue as the development progressed.
"I've no doubt that they will be sourcing labour primarily from Coober Pedy where they can," he said.
Mr Bond agreed the employment potential was huge.
"You've got transportation, you've got support, you've got drilling, you've got piping, you've got cooks and cleaners and maintenance people ... the list goes on," he said.
Based on the latest assessments, Linc is working with Barclays Bank to secure an investment partner.