Neal-1 is about 4.8 km south-southwest from Zuspan-1, the spudding of which last month became the first move into the US energy market by the Melbourne-based producer.

“The two wells will test for coal thickness, gas content and gas composition from the Freeport and possibly the Kittaning coals,” said managing director Stephen Mitchell.

“We expect results from the wells will be available once gas desorption testing is complete in several weeks, after which Molopo will analyse the potential of the project area’s sandstones and shales to produce gas.”

On September 22, Molopo announced that drilling had started on its first CBM hored hole, Zuspan-1, to be drilled to a total depth of 280 metres.

The project contains multiple oil and gas targets in sandstones, shales and coals, with gas in adjacent leases currently being produced from the Ohio Shale zone, said Molopo. The joint venture expected the target reservoir to contain potential CBM reserves of over of 50 billion cubic feet.

Molopo, which has a 50% interest in the project, said gas flows were recorded in the 1920s from these coals in two wells drilled within 1.6 kilometres of Zuspan-1.

Covering 8000 acres (3237 hectares), Mason County is Molopo's first US project, adding to its CBM producing and exploration interests in Queensland's Bowen Basin and the Gloucester Basin north of Newcastle in New South Wales.

The company entered the project through US partner Foree International, which farmed into an agreement with leaseholder Base Petroleum. Base Petroleum currently owns 100% of 37 existing wells producing gas from shales in the joint venture's leased area.

This arrangement leaves large targets in the fractured Ohio Shale open to Molopo and Foree. It will also allow appraisal and development drilling of the Berea, Oriskany and Newburg Sandstones, and the CBM prospectivity of the Freeport and Kittaning coal seams.

The joint venture also expects to acquire additional acreage in the vicinity, said Molopo.