Operator Santos has informed the joint venture that the Mitchell Rig 151 is expected to arrive at the Mahalo-2 well site the week starting August 28, following drilling operations at Fairview.

Mahalo-2 will be the final well for Comet to farm-in to in ATP 337P. Upon drilling and testing the well, Comet will have earned its majority 40% equity in the JV, with Santos and Origin Energy each retaining 30%.

The well has been designed to assess the economic significance of the strong gas shows encountered while drilling the Mahalo-1 core hole.

At the time of drilling, Santos decided it was not safe to test Mahalo-1, due to high gas levels and overpressure in the well.

The Mahalo-2 well will be drilled to a point immediately above the Bandanna coal and then cased.

The main coal seam will then be drilled out using compressed air and then tested.

The Mahalo project area is estimated to contain a contingent in-place gas resource of between 180 billion cubic feet and almost 1 trillion cubic feet. The most likely volume is estimated to be in excess of 400Bcf.

A recovery factor of 40% suggests that between 70 and nearly 400Bcf of gas might be recovered. Recovery factors of 60-70% have been recorded in a number of active coal seam gas developments in the US, the company said.