Anzoil's move into the Utopia Oilfield in Queensland has put the company in a solid position to support its coal bed methane operations while leaving enough project revenue for further exploration.

The completed acquisition of a 45% interest in ATP560P in South West Queensland from Oilwells, Inc of Kentucky, was made at a cost of $1.7 million, and was back dated to 1 January, 2003 entitling the company to its share of the proceeds from the field from that date.

The field has been in production for over twelve months and contains three producing wells, which Anzoil rejuvenated and installed new pumping equipment and worked over. A re-perforation program yielded an initial pump testing production rate of 160 barrels of fluid per day, around 50 bopd greater than the company expected.

Arrow Energy (operator) and Anzoil also started production from the Tipton West-1 pilot well located in ATP683P, following the completion of a pump test, which verified the flow rate parameters for the pilot production scheme.

At a pump rate of 2282 barrels of water per day, the fluid level stabilised at 129m below surface, which the company says confirms the good permeability of the coal seam. Gas production began immediately, confirming that the coal seam is gas saturated.

Anzoil was also able to reduce its corporate for the year costs from $1.9 million to $0.9 million. In the June quarter these were $224,000, about the same as in the previous quarter.