Brisbane company Linc Energy says independent studies have confirmed a major shale oil source in South Australia's far north, which officials have estimated could be worth $20 trillion.
The company says US-consultants have carried out drilling and geological and seismic surveys around Coober Pedy.
Linc Energy holds rights over more than 65,000 square kilometres of land in the Arckaringa Basin and started explorations in 2008.
In a statement to the Stock Exchange, the company said reports from US-based consultants indicate underlying rock formations "are rich in oil and gas-prone kerogen".
The company says up to 233 billion barrels of oil are estimated to be trapped in the shale.
Chief executive Peter Bond says even if the amount of retrievable oil is well below that, the discovery is still "bigger than the Cooper Basin and Bass Strait combined".
"If you stress test it right down and you only took the very sweetest spots in the absolute known areas and you do nothing else, it's about 3.5 billion [barrels] and that's sort of worse-case scenario," he said.
"So if you took the 233 billion, well, you're talking Saudi Arabia numbers. It's massive, it's just huge.
"We've also spent a lot of time with our own geologists and external geologists trying to unlock what's the best option there.
"What it could do is really turn this thing into the next boom, so where you saw coal-bed methane transform Queensland and the gas industry, shale could and I think will transform South Australia and a potential oil boom."
Costly extraction
But Mr Bond says it could cost up to $300 million to prepare the site for production.
"We've got something in excess of a billion-dollar market cap... but the issue here isn't just capital. It's the expertise to unlock the acreage as well," he said.
"We will seek a partner to both fund that and work with us from a technical perspective and that could be anybody.
"It could be a major oil company, it could be one of the major operators in shale, it could be one of the larger overseas oil groups."
Mr Bond says the discovery has the potential to bolster the nation's energy security.
"We are importing more and more oil every day. Australia was relatively self-sufficient in oil in 2000, 2001, but since then we've been falling off the peak oil curve for quite a while now," he said.
"Australia currently consumes just under a million barrels of oil a day of which we are probably producing something less than half that or around half that depending on the numbers you read.
"You'd have to get up over 500,000 barrels a day to put yourself into a net energy export position which would be significant.
"Any oil field that can do 500,000 barrels a day is massive in anyone's books.
"It would be a push to get to that high. That would basically be getting out to full production. It's hit all the runs and done all the right things to get up to that size but if it does, you potentially would be getting up around being an oil exporter.
"By then much of your other oil production in Australia would have dropped off even more and you'll be just starting to fill the gaps there."
'Remote and deep'
Shale oil is more costly to extract and more controversial than conventional crude and involves fracking, in which water is pumped in to break up the shale.
South Australian Mining Minister Tom Koutsantonis says it is much too early to say if the reserve can be profitably tapped.
"What they think they've found, or they have found, but whether it's economic to recover or not is still the question, is vast reserves of shale oil," he said.
"It's basically oil which is trapped in low-permeability, clay-rich rocks so it's within the rocks and you fracture-stimulate those rocks to release the oil.
"There are processes now where you can unconventionally retrieve these reserves.
"If the reserves and the pressure was right over millions of years and the rocks have done the things they think they've done, they think they can extract vast reserves of oil out of South Australia which would have a value of about $20 trillion.
"South Australia is blessed with abundant resources but there are a few setbacks and those setbacks are that they're remote and they're deep."
But Mr Koutsantonis says the discovery is not another example of 'pie in the sky' after BHP Billiton cancelled its Olympic Dam expansion in the state's north last year.
"All these things are luck and risk. I think what we're seeing up there is a very, very big deposit. There's more drilling to be done. If it comes off, it will certainly be a very significant amount of oil reserves."
'Quality not quantity'
John Young, a senior resources analyst at Wilson HTM, says it is important to take these preliminary figures with a grain of salt.
"I think we need to recognise these represent, at this point in time, what people believe to be there and what might be able to be recovered, but we've still got some significant way to go before people have actually commercially recovered resources out of these shales," he observed.
He says it is still to early to fully assess the quality of the resource, and how much is extractable at a commercially competitive cost.
"I think it's unwise to hang one's hat too much on the size of the numbers," he added.
"The numbers are going to be very large, but we really need to move from that in terms of this focus around the quantity to ultimately one of the quality of the resource - how good is it, how economic will it be, and that's going to take a significant amount of exploration and appraisal work before the industry's in a position to determine that."
