Cirque Energy (UK) Limited has until Wednesday, 31st March 2011, to complete its investigations near Fiskerton after Lincolnshire County Council granted the company more time.
The energy business had been required to stop work at Fiskerton Airfield on March 31, 2010.
However, the search at the Reepham and Fiskerton No. 1 wells can proceed following a decision by the county council's planning and regulation committee.
Cirque Energy will be required to make a separate application if it finds oil and wants to expand operations.
Committee Chairman, Cllr. Ian Fleetwood, Conservative (Cherry Willingham & Fiskerton Division) is reported to have said:
"I have been to Fiskerton Parish Council meetings and they have not registered any issues with me."Cllr. Fleetwood, who was re-elected as a West Lindsey District Councillor for the Bardney Ward, last week and added nodding donkeys had not been a campaign trail issue.
Temporary planning permission allowing one exploratory bore hole to be drilled was first granted in July 1997. This was extended further in March 1998 and in 2002 permission to allow oil production was given to Cirque Energy.
The nodding donkeys were later left unused for five years and work has just recently been carried out to prepare for future testing.
Ministry of Defence land manager, Defence Estates, and West Lindsey District Council made no objections to the application during the consultation period.
Cllr. Mrs. Meg Davidson, Conservative (Fiskerton Ward) is reported to have said rising oil prices could make the business near the village 'economically viable' for its owners.