The Sydney-based company is currently producing from the nine-well Bibblewindi production pilot with the aim of achieving the first independently certified gas reserves for the Gunnedah Basin gas project.

The initial proved and probable (2P) gas reserve target from the pilot is 50-100 petajoules by the third quarter this year.

“The pilot has already reported very encouraging well interference and early gas production,” Eastern Star said.

“Based on the encouraging early production results from the Bibblewindi production pilot, the Gunnedah Basin gas project (coal seam methane) joint venture decided to accelerate the drilling required to increase the gas reserve target.

“The four new core holes are necessary to increase the independently certified gas reserves to the 200PJ target by year-end 2007 by confirming coal thickness, gas content, gas composition and permeability data.”

Eastern Star recently announced a memorandum of understanding with New South Wales-owned Macquarie Generation for the sale of up to 500PJ of gas. Macquarie is the owner and operator of the Hunter Valley-based Bayswater (2640MW) and Liddell (2000MW) power stations.

To meet these requirements, the joint venture is planning a new production pilot and core hole program with the aim of achieving 600PJ of 2P gas reserves by end-2008.

The Gunnedah Basin gas project is between Narrabri and Gunnedah in New South Wales covering 9100 square kilometres of the Gunnedah Basin.

It contains one of the largest onshore natural gas accumulations in Australia alone totalling 17,000PJ of gas-in-place in the two coal seams that are over 10m thick in each of two coal-bearing formations.

Interests in the project are operator Eastern Star (65%) and Gastar Exploration (35%).