“With up to a couple of trillion feet of gas [3P resserves] at this field, the PNG pipeline doesn’t seem so urgent now,” Lydard told EnergyReview.net.

“Coal seam gas in Queensland is becoming big business. CH4, Origin, QGC, and now Arrow and Comet Ridge, are proving up reserves and sealing sales contracts.

“We’re well on the way to commerciality at Tipton West and I think it’s time Comet Ridge was rerated by the market. This field will take us from being a minnow to a medium-sized gas producer.”

Reserves at Tipton West have received an initial certification from Netherland Sewell and Associates Inc of Dallas, Texas quantifying them as: Proven 1P, 61PJ; Proven + Probable 2P, 143 PJ; and Proven + Probable + Possible 3P 2,028 PJ.

The partners expect increases in the 2P reserves as more production wells are drilled, they said in separate ASX statements.

While Comet Ridge has a market cap of just $6m, its share of the 3P reserves is 400PJ and it expects gas sales and cashflow by the end of next year, Lydyard said.

“The 3P reserves confirm the enormous potential of this field and are almost double the previously certified 3P reserves of 1 trillion BCF announced in July last year,” Lydyard said.

The partners have gas sales memoranda of understanding for 123 PJ of gas reserves from the Tipton West field. These MOUs comprise 60 PJ to Wambo Power Ventures, 48 PJ to Ergon Energy and 15PJ to BP.

The 2P reserves exceed the total committed in the MOUs, and all of these agreements can now proceed to gas sales agreement negotiations with a view to achieving financial close by the end of September 2005 and first gas sales from Tipton West within a further 12 months, Lydyard said.

Comet Ridge’s next project will be the Mahalo CBM development in the Bowen Basin, Queensland. It currently holds 20% in Mahalo and has exercised it option to earn a further 20% from partner Santos by funding threee wells to test the interpreted free gas found during the drilling of Mahalo-1.

"Our decision to exercise our option to increase our equity reflects the confidence we have in Mahalo and its potential to host significant gas reserves that can be rapidly commercialised," he said.

Comet Ridge is also looking at opportunities in oversea “premium gas markets”, according to Lydyard. While its would continue to focus on CBM, the company would consider opporunities in conventional oil and gas.

The Tipton West partners are Arrow Energy 80% and Comet Ridge 20%.