The Sydney-based company yesterday said the drilling program began on well GL-14 in the Camden Stage 2 area, utilising specialised drilling and steering equipment.

Drilling operations are now finishing the directional build section to the top of the Bulli coal seam to prepare for drilling the horizontal section in the coal seam, it said.

Sydney Gas said GL-14 would be drilled in-seam to test the horizontal production performance of the Bulli seam.

Total well length is expected to be 2380m with 1500m in the coal seam while average coal thickness is anticipated to be 4.5m at a true vertical depth of 690m.

Sydney Gas said a higher flow rate and ultimate recovery is expected compared to a vertical well due to a larger drainage area to be swept by an SIS well.

“It is believed that the application of this engineering approach may allow commercial exploitation of lower permeability areas, thinner coal seams and under-saturated seams within the project area,” the company said.

“SIS wells may also target gas reserves that would otherwise be difficult to access because of land access constraints.

“This knowledge will also allow the joint venture to potentially increase the eventual gas reserves, which can be booked for the Camden Gas project.”

Drilling of the horizontal section is expected to begin on Thursday, while overall drilling of the well is expected to take about 22-25 days.

AGL Energy Limited is operator of the Camden Gas project with a 50% interest while Sydney Gas owns the remaining stake.

The joint venture said it is now preparing a business case for the drilling of up to five more SIS wells this financial year.