The Sepia was a three-masted iron barque of about 725 tons and 54 m. Launched in 1864, she left London in September 1898 bound for Fremantle with a cargo of alcoholic drinks and general goods. On the night of 28 December 1898 she hit a submerged rock on Five Fathom Bank, recorded as Challenger Rock, and sank in less than ten minutes.

The wreck lies in 12–15 m south-west of Carnac Island. It is broken up but still relatively intact in places. Its most remarkable feature is in the stern cargo hold, where hundreds of bottles remain neatly stacked and barrels lie on their sides, much as they were loaded. There are also many small artefacts scattered through the site. The wreck has been heavily looted in the past, which makes what remains more important: the Sepia is protected under the Historic Shipwrecks Act, and removing or disturbing anything is an offence.

The iron structure supports sponges and ascidians, and the usual Five Fathom Bank fish, such as buffalo bream, bullseyes, old wives and wrasse, shelter around it.

The site is very exposed and can be dived only in good weather with low swell and offshore winds. Visibility is usually 3–10 m and can drop quickly with ground swell.

The Sepia suits Open Water divers with boat experience and a strong interest in maritime history. The stacked cargo makes it one of the more evocative historic wrecks in the Perth area. It combines well with Challenger Rock nearby for a second, shallower dive.

Launch at Woodman Point (closest) or Rockingham and run west towards the gap between Carnac Island and the northern tip of Garden Island. The bow is at S 32°07.980' E 115°38.515', about 2.9 km offshore of the islands' line. Anchor in sand clear of the wreck.

Allow about 15–20 minutes from Woodman Point. There is no mooring, so check the sounder for the wreck before dropping the shot, and leave a crew member on board: the site is exposed and boats pass between the islands.

The site is very exposed and diveable only in good weather: low swell (under 1 m) and offshore easterly winds. Ground swell stirs up the bottom and cuts visibility. The summer sea breeze makes the anchorage rough by early afternoon; winter north-westerlies close it.

After heavy winter rain, turbid water from the Swan River and Cockburn Sound can also reach the site.

Descend to the wreck at 12–15 m and work from the bow to the stern cargo hold, where the bottles and barrels lie. Look but do not touch. Return to the shot and ascend.

No regular operator; dived by clubs and private boats in calm weather.