Wireline logs will be used to determine the significance of these gas shows once the well reaches total depth, according to the Brisbane-based company.

Yesterday, drilling was going ahead in a 6 1/8-inch hole at a depth of 2505m – about 500m below the total depth reached by the original Champagne Creek-2 well.

Operations involve re-entering and deepening the original Champagne Creek-2 well, which encountered a 50m gross gas column in March last year.

At this time, the joint venture tried to sidetrack the well, but operations were aborted due to directional drilling equipment failure. As a result, the entire Champagne Creek-2 well bore has now been cleaned out and is being used as the platform from which to deepen the well.

This time, the well will primarily target the Triassic-aged Clematis Sandstone, which has not yet been intersected on the Champagne Creek anticline.

The Champagne Creek structure is a dip-closed anticline with an estimated potential resource at the Clematis Sandstone level of up to 60 billion cubic feet of recoverable gas.

With a planned total depth of 2700m, the well is expected to take about 16 days to drill and evaluate.

Under an earlier agreement, Beach will earn a half-stake in Sunshine’s 100%-held ATP768P by funding the Champagne Creek 2A deepening project. If Beach decides to proceed with its farm-in effort, it is obligated to pay a portion of Sunshine’s back costs to date.