Empire Energy Corp., a U.S. exploration company, unveiled a $31 million program to drill up to eight test wells at key locations in an exploration lease covering 23 percent of the state, The Australian reported.

EEC also released a prediction that the lease could hold between 67 million and 145 million barrels of oil and between 344 billion and 799 billion cubic feet of natural gas.

The company estimates that with current record prices, the resource could be valued at between $7 billion and $15 billion.

"Really the potential could be significantly more, but you have to be conservative," said Phil Simpson, executive director of Empire's local subsidiary, Great South Land Minerals. "You can comfortably say that (an exploration) tenement can hold up to $15 billion -- I don't think that's a wild assertion."

The Tasmanian government stands to reap 12 percent of the wellhead value of any oil or gas discovered in royalties and is excited by the development but also cautious.

However, Victor Sula, a senior analyst with investment research company Beacon Equity Research, raised concern over whether Kansas-based EEC had sufficient capital to cover the high costs and uncertainties of further exploration.