The coal-bed methane producer posted a net loss of $3.99 million, an improvement on the $11.05 million loss it recorded in the corresponding half of 2003, which included an $8.32 million write-off of accumulated exploration, evaluation and development expenditure.

Sydney Gas said its Ray Beddoe treatment plant, part of its stage one Camden gas project in the Sydney Basin, continued to run at maximum capacity.

Gas sales from the plant for the December half reached $1.41 million.

The Rosalind Park gas plant, part of the second stage of the Camden project, was commissioned in December and first sales gas was delivered to Australian Gas Light within budget and more than two weeks ahead of scheduled, according to Sydney Gas.

The company said it was currently aiming to maintain steady production at the Ray Beddoe plant and gradually ramp up production at the Rosalind Park facility by continuing to dewater existing CBM production wells and systematically tying in new production wells.

Sydney Gas has ordered a second compressor unit to be installed at Rosalind Park during the second half of this year.

Drilling and testwork was also planned for the Hunter and Wyong gas projects.

Sydney Gas shares closed unchanged yesterday at 75 cents and fell five cents (6.7%) to hit 70 cents by midday today (AEDT).