The company already has two CBM development and appraisal projects in Queensland – the Kogan North and Tipton West fields in the Surat Basin.

Arrow reports that its Boyne River-2 core at ATP 679 (PLA 206) permit drilled to 780 metres, intersecting 95m of net coal including one continuous coal seam over 50m thick.

This seam was tested and flowed with 60,000 cubic feet each day of gas. It also produced 2200 barrels of water daily.

“This was an exceptional result, both in terms of seam thicknesses and flow rates from a small diameter core hole, and suggests high potential rates for wells drilled and completed for production,” Arrow told the ASX.

“Given the exceptional results of the flow test and the early analysis of the gas desorption results to date, Arrow plans to drill one or more production wells as a pilot on the field in the third quarter of 2005.”

Boyne River-2 is 60 kilometres from Gladstone, Queensland fastest growing industrial gas market. It is an appraisal of the 2004 discovery, Boyne River -1, which exhibited 70m of net coal with similar flow test results. Arrow has a 100% stake in the permit.

At the Silverdale-1 CBM well, about 50km south-west of Brisbane in ATP 641P, 24 metres of coal and a gas flow of 200,000 cfd were recently recorded.

Arrow said it intended to under-ream and properly flow test the prospective coals recently flow tested in the exploration hole.

Early results from coal cores taken from the Peak Crossing-1 core hole, 17km east of Silverdale-1 indicated the potential for high and most likely saturated coal seams in the area.

Silverdale-1 could probably produce at higher rates following planned under-reaming and early commercialisation of the project was possible because it was close to a market, Arrow said.

Meanwhile development drilling continues at Kogan North, about 40km west of Dalby, and in which Arrow has an equal interest with CS Energy.

Nineteen wells have been drilled and completed, with advanced operations on four more wells, Arrow said.

Two wells are now on production to start the initial field dewatering process. A third is being added this week and the project is on schedule for an October delivery of first sales.

The 30-35 well project will supply four petrojoules of gas each year for 15 years to CS Energy’s Swanbank E power plant, near Ipswich in south-east Queensland.

At Tipton West, about 20km south of Dalby, the Tipton–17 appraisal well has been completed.

The new well is about 4km north of the main producing wells of the field’s pilot bore. Logs indicated 12m of net coal in the four upper seams of the Walloon coal section, Arrow said.

The well will be brought onstream in the near future and should lead to additional 2P reserves being added to the field. Interest in Tipton West are split between Arrow 80%, Comet Ridge 20%.

The pilot has continued to perform well with a peak rate of over 1 million cfd, Arrow said.