Production testing at LMG-3 was halted recently due to equipment failure. The replacement equipment, a submersible pump, has recently arrived and will be installed in the near future, said Molopo.

When first tested, the LMG-3 well was producing more than 280,000 cubic feet of gas per day, despite a water level only 80 metres below the surface, said the company. The lowermost target seam in this well occurs at 405 metres.

Molopo said the LMG-3 well was completed across four intervals, representing a net coal thickness of up to 23 metres.

The Gloucester Basin permit is about 100km north of Newcastle and covers 1,308 square kilometres, with over 200 square kilometres of prospective coal measure sequence.

Molopo and joint venture partner AJ Lucas Coal Technologies will initially focus on a five-square-kilometre area referred to as the Stratford Prospect, which contains an estimated 90 petajoules of gas.

Molopo initially held a 25% stake in the project, which was diluted earlier this year to 14%.

Now Molopo holds a 30% interest, while AJ Lucus occupies the remaining 70%.