“Production testing of the Lacerta-7 well continues to give encouragement with consistent water flow rates of 850 barrels per day, and sufficient free gas to independently fuel the running of the down-hole pump,” the Brisbane-based company said.

“It is expected that pump speed (and hence water rate) will be slowly increased to reduce the fluid level in the well bore, and thus accelerate the dewatering process.”

Sunshine said civil engineering work to commission the Lacerta-5, 6 and 8 pilot wells is continuing, while Mitchell Drilling Rig 101 has drilled the Lacerta-23 pilot well to total depth.

This well has now been logged, under-reamed and cased pending completion as a future gas producer.

The company said the rig is now moving to Lacerta-22, the second pilot production well in the current series of eight new pilot wells on Lacerta.

Meanwhile, Mitchell Rig 123 has completed coring operations on the Lacerta-11 core hole and has moved to the previously drilled Lacerta-2 core hole to conduct the deferred permeability testing of the intersected coals in that well.

Sunshine said the rig will then move to the Lacerta-10 core hole.

Lacerta-11 intersected the Juandah and Taroom coal seams as prognosed and permeability tests conducted on the well are currently being analysed.

Sunshine holds a 100% working interest in ATP 795P.