The Mahalo project has been renamed to avoid confusion with Tipperary’s world class CSG development at Fairview, which is also known as Comet Ridge.

Under an agreement with Santos (Operator) and Oil Company of Australia (now Origin Energy CSG Limited), the company has the right to earn 40% of the Mahalo project, by drilling a third test hole. The third test hole is likely to be drilled as a follow up to the Mahalo-1 hole that encountered interpreted free gas in a coal seam in the Bandanna Formation.

The coals of the Bandanna Formation are the focus of development at the Fairview and Spring Gully coal seam gas projects, less than 150 kilometres south and on the same geological structure.

The test hole will be drilled and completed to enable extended production testing to be

conducted.

“We are very pleased with the results of the first two holes, as they have confirmed the presence of significant gas in the coals and provide a strong indication as to whether the coals will produce gas at economic rates.

“The third hole, which subject to rig availability could be drilled as early as late July early August, will be specifically designed to limit the damaging effects of the drilling process (coals are very susceptible to damage by drilling fluids) and to permit flow testing of the coal interval,” said managing director Andy Lydyard.

Santos (Operator) and Origin Energy CSG will each own 30% in the Mahalo CSG project, after the company has earned its 40% interest.