Managing director Tony Gilby said the Atria appraisal program has confirmed the presence of thick, highly gassy coals throughout the Permian Fair Hill Formation over an area of about 350 square kilometres within ATP 684P.

"These results confirm that this permit has considerable CSM in place," he said.

"They are particularly encouraging as we push to increase Sunshine's strong reserve position and secure feed stock for expansion of our proposed SUN LNG project at Gladstone in partnership with Sojitz Corporation."

"We will now work rapidly towards identifying the optimal production well completion technique to maximise gas recovery from the seams."

The Atria core-hole program intersected five main coal seams with strong geological correlation between the wells.

The company has put 62 coal samples on desorption test to develop a comprehensive depth and gas-content analysis.

Gilby said permeability measurements are encouraging and in line with pre-drill expectations.

"Permian coals in this region are generally viewed as being tight, therefore early indications of permeability are a good sign for commercial gas recovery," he said.

"Further permeability modelling now underway will be used to design a pilot well drilling program."

Sunshine owns 100% of permit ATP 684P and is currently calculating prospective resource figures for the project area.