The Surat Basin project’s five wells became fully operational in December and last week they were producing an aggregate 706,000 cubic feet of gas per day.

The strong flow rates would improve the profitability of the CBM field once QGC started selling the fuel and showed the company was well on track to proving it has enough gas to supply a long-term contract for Incitec-Pivot’s Brisbane manufacturing plant, managing director Richard Cottee said.

"QGC has already certified 169 petajoules (PJ) of proved, probable and possible (3P) reserves for the Argyle field in ATP 620P following testing of the first Argyle pilot in early 2004," Cottee said.

“The Argyle East results should go a long way towards meeting the additional reserves required under the Incitec Pivot contract."

In addition, the company’s other CBM fields were also exceeding initial expectations, he said.

"The high flow rates experienced at Berwyndale South-9 (517,000 cfd), Argyle-4 (477,000 cfd) and now Argyle-11 (317,000 cfd) are causing us to revise our previous economic forecasts for coal seam gas development of both the Argyle and Berwyndale South fields," he said.

"Gas flow rate is the single biggest determinant of project profitability, and the recent breakthrough in well design leading to much increased gas production, will ultimately lead to a greater return for QGC’s shareholders."

QGC (59.375%) and Pangaea Oil & Gas Pty Ltd are joint venturers in ATP620P containing the Argyle field, which is contracted to supply Incitec Pivot Limited with Argyle field gas over 10 years from 2007.

QGC (50%) and CS Energy Ltd (50%) are joint venturers in ATP 632P containing the Berwyndale South field.