Sales volumes during the quarter were also boosted 15% to 989TJ. Production peaked at just over 11.75TJ on December 22, with sales averaging 10.75TJ per day, the company said.

Gross revenue from the Camden project during the quarter was $3.12 million. Sydney Gas said this was the first time that sales had exceeded $1 million per month.

The company also said it has received Camden gas certification of 65.7PJ of 2P reserves and 54.6PJ of 1P from Cawley, Gillespie & Associates. But this estimate was only for the three-metre thick Bulli Coal Seam, and not the Balgownie and Wongawilli seams, it said. Netherlands Sewell & Associates have been appointed to update these reserves.

Queensland Gas Company recently made a $88 million off-market takeover bid for the company, which Sydney Gas is still considering.

This followed the resignation two months of ago of Sydney Gas’ entire board, including former Olympics minister Michael Knight, after dissident shareholders threatened to dismiss them at an extraordinary meeting.

QGC's bid would also resolve the question of how A$30 million worth of convertible notes could be repaid to Australian Gas Light by April and June.

In its quarterly report, Sydney Gas said it was still reviewing financing options to repay the debt.

The previous board had been planning to resolve the problem through a $10 million share placement at close to market price, followed by a $30 million 1-for-3 rights issue at a 15% to 20% discount to market. But when the rebels moved to eject the board, the financiers stopped the talks.

QGC has offered to refinance the notes at a much cheaper cost if it gains control of Sydney Gas.

Looking forward, Sydney Gas said it will focus on finalising operational agreements with AGL, which will next month become operator of the Camden project.

The company also plans to increase seismic activities to boost proven reserves at Camden stages 1,2,3 and 4.

In addition, drilling is expected to resume in April, with the the arrival of two rigs.