The Bibblewindi drilling program will begin as soon as the current workover operations are completed, ESG said.

ESG expects the nine wells, to be drilled back-to-back and completed using fraccing, will be on production test by mid-year.

Successful production testing would provide the joint venture, which also includes Hillgrove Resources and Gastar Exploration, with certification of an initial volume of 2P reserves from an estimated 8.5 trillion cubic feet of gas, according to ESG.

Subject to well performance, the certification would enable the joint venture to develop the CBM field and commit to gas sales contracts, ESG managing director Dennis Morton said.

“Gas markets continue to grow with various third parties already showing strong interest in pipeline construction and gas transport from Bibblewindi and surrounds to regional and markets further a field, as well as for local and regional gas fired power generation,” Morton said.

This year’s program includes establishing a confined production pilot pilot by drilling eight closely spaced new production wells near the existing Bibblewindi-1 production well, ESG said.

“The confined pilot is designed to accelerate dewatering of the 6.5 to 12 metre thick Bohena coal seam and therefore achieve commercial gas production rates in a shorter period than would be possible for isolated (unconfined) wells or for wells drilled on larger spacing,” Morton said.

He said the joint venture aimed to establish commercial flow rates from the pilot in the fourth quarter of this year.

ESG also plans to drill a pressure monitor away from the production pilot to extend the area of reserves.

Upon completion of the work program and production tests, ESG intends to connect all production wells in the Bohena Project Area, including the eight new wells, to the Wilga Park Power Station for electricity generation and sale.

Bibblewindi-1 was fracced late in 2004 and placed on continuous production test shortly after. ESG said initial results from the 6.5 metre thick Bohena seam suggested a highly permeable coal seam with high water and increasing gas production rates.

The joint venture currently has five unconfined CBM wells for production testing and are currently at various stages of de-watering.

Combined production from these five wells to date has been up to about 300,000 cubic feet per day. But ESG said more work was needed to optimize production from these wells.

“Notwithstanding, water and gas production rates achieved to date support the presence of a significant commercial accumulation of coal seam gas within the Bohena Project Area,” Morton said.

“With the arrival of the drilling rig, several of these wells are currently undergoing workover operations, as planned and as is usually required for coal seam gas wells, to maintain and further increase gas production rates.”

The project is managed by Eastern Star Gas Limited and is owned by the Gunnedah Basin Gas Project (CBM) joint venture comprising: Gastar Exploration Limited (35%), Eastern Star Gas Limited (32.5%) and Hillgrove Resources Limited (32.5%).