Molopo believes it is now the only listed, small cap producer among the range of CBM hopefuls that has currently has commercially recoverable reserves, after consulting firm, Netherland Sewell & Associates, put an independent 2P reserves figure of 26 petajoules on the field.

The Mungi 06 well is the first of nine new wells to be drilled under the Phase 1 development program. Two existing wells will also be connected during the eleven well program.

A significant investment in gas treatment facilities and a 7.7km, 10 inch pipeline is also being included in this first phase of development.

The drilling, fracture stimulation, gathering systems, pipeline and installation of the gas treatment equipment are expected to be completed by the end of 2003.

The Mungi coal bed methane (CBM) gas field is located in PL94 in the Bowen Basin, and is the closest CBM Production Licence to the significant Gladstone industrial market.

The development program provides for a 10" diameter pipeline 7.7 km in length to be constructed between Mungi and OCA's processing facilities at Moura.

Molopo and Helm are also acquiring a 5 TJ/day compressor to boost output and to reduce costs for the field's second stage of development.

The first four new wells in the initial phase will be funded under the existing joint venture arrangements (OCA 50%, Molopo 25%, Helm 25%).

OCA will not participate in the subsequent five wells, entitling Molopo and Helm to a half share each of gas production from these additional wells. OCA has an option exercisable by February next year, to take a 50% interest in these five wells by funding an additional five wells.