Magellan said the OD&E Rig 20 drill rig has been mobilised and should spud the Gregory River-3 well (ATP-613P) on or around the 24 March.

The well is located just 200m northeast of Gregory River-1, a wildcat drilled by Shell in 1966 using an overbalanced mud system and which showed a small presence of gas.

Magellan said GR3 will be a twin of the original 1996 well and use air as the drilling fluid rather than conventional mud to limit damage to the reservoir section and optimise gas flow. It is anticipated the well will take some 21 days to drill to the planned total depth of 3200m.

Magellan said gas discoveries in the Maryborough Basin, because of its strategic location, will be able to compete favourably with conventional gas and coalbed methane in the major east coast markets.

The participants in the GR3 well are Magellan - 48% and operator, Novus Petroleum 50% and QGAS 2%.