In pilot production drilling in the Walloon Coal Measures of the Clarence-Moreton Basin near Casino, New South Wales, has seen five pilot production wells and one pre-collar hole completed.

All wells have targeted the two identified coal seams at a depth of 500 – 650 meters.

The four wells now placed on production test are all showing a steady build up in pressure as they are dewatered. These wells will be dewatered over the coming weeks.

The MSC-05 well is currently not being drawn down as a result of mechanical failure of the pump. This well will continue to be drawn down once a working pump is re-connected, according to the company.

“The company is closely monitoring gas flows, gas composition, water production rates and water composition during draw down,” Metgasco said.

“Once sufficient data has been collected estimates of long-term flow rate capabilities can be assessed and water management plans developed.”

Well head data from the recent drilling program has confirmed that the coal seam reservoir is over-pressured at the south Casino pilot field, the company said.

“Data collected from MSC-07 has confirmed a 35psi overpressure previously measured on earlier wells,” Metgasco said.

“Over-pressuring allows coal to hold a higher gas content and assists the delivery of gas from the coal seam reservoir to the production well. It is likely to have a significant positive impact on the productivity of the south Casino project.”

Isotherm testing completed during the previous quarter confirms the coal seam reservoir has a high gas storage capacity and is highly gas saturated, the company said.

The planned forward work program for this quarter involves: completing drilling of core hole MSC-08 to production depth; continuing to monitor gas and water flow rates and optimising well productivity. In addition, the company will begin the reserve certification process.

Metgasco has entered into a cooperative Agreement with Country Energy to potentially develop a 12MW gas fired electricity project to be located at Casino. It will continue with detailed design and commercial work for this project.

The company said it would also complete re-interpretation of reprocessed seismic data for conventional gas accumulations and is negotiating additional gas sales memoranda of understanding.