Geoflite (Aust) Pty Ltd will provide multispectral fracture and joint system interpretations in preparation for the location of the initial drill holes. Sunshine said detailed fracture and joint analysis prior to the selection of final drill locations has proved to greatly increase the probability of establishing commercial gas production.

It said priority exploration targets are located in zones of high density micro-fracturing, indicating areas of maximum fracture porosity. These locations will normally be on fracture intersections with high gas flux, which can facilitate efficient de-watering and enhance gas production from the natural fracture system.

The precise locations of the natural fractures and joint sets are very important in the application of directional or horizontal drilling, since it is essential to know the fracture directions in order to intersect the maximum number of highly productive fractures in high density fracture areas.

Sunshine said this method of fracture and joint analysis had been widely used in locating coalbed methane production wells and fractured wells in areas in the US, as well as a number of areas in Australia. Under the Geoflite (Aust) Pty Ltd agreement, it is planned to have reports completed by the end of August.

Sunshine also said it was waiting for a response from the Australian Taxation Office regarding the Product Ruling for the Managed Investment Scheme it is planning which will provide most of the exploration capital for its planned drilling program.