The company said that production testing had commenced on its LMG03 coal bed methane well, one of two trial production wells in the company’s Gloucester Basin permit. Testing of the second well, LMGO2, is also due to commence shortly.

Four zones with over 16 metres of coal were hydraulically fracture stimulated with water and sand ahead of the LMGO3 well being placed on a medium-term (6-12 months) production test.

Molopo’s managing director, Stephen Mitchell, said that gas production results would be announced once the de-watering process was underway and gas production rates had stabilised.

“Prior to production testing, nine CBM cored wells had been drilled in this area that demonstrated thick coals, high permeabilities and good measured gas contents. This makes Gloucester a very attractive target.”

The second well, LMG02, has been drilled as a horizontal (or lateral) well generally referred to as a surface to in-seam (SIS) completion.

“Retrieval operations of the bottomhole assembly in LMG02 have been successful and investigations are underway to assess various options for pump installation in this well,” Mitchell said.

“Our intention is to commence production testing of the lateral in coming months.”

The Gloucester Basin permit is located 100km north of Newcastle and covers an area of 1,308sq.km, containing more than 200sq.km of prospective coal measures. The initial focus is on a five square kilometre area referred to as the Stratford Prospect which has an estimated 90 petajoules of gas in-place.

Interest holders in the Gloucester Basin project are, AJ Lucas Coal Technologies (75% & Operator) and Molopo Australia Limited (25% & project manager).