The Brisbane-based company said it had completed operations to deepen the Overston-1 conventional gas well to assess the Lower Tinowon Sandstone, one of four gas zones intersected to date in the Overston area.

A coiled tubing unit (CTU) was used to assess the Lower Tinowon zone, which would also help assess the extent of deeper gas zones intersected at the Overston-2A well.

Though drilling was terminated at Overston-1 at a depth of 3122 metres because of deteriorating hole conditions, wireline logs were acquired in the stable section and were being evaluated.

Sunshine said the Lower Tinowon exhibited poor development of reservoir-quality sandstone and, as a result, newly acquired data would be added to the geological model to determine a forward work program.

Nevertheless, the company said it had now established that underbalanced drilling with coiled tubing was achievable at Overston and this technique would be appropriate to achieve commercial flow rates from better developed reservoirs in shallower sections.

The Overston resource is contained in the Permian-aged Tinowon sandstone unit. The Queensland-based company said to date, two wells have been drilled into the Tinowon and both have encountered gas.

At its nearby Lacerta coal seam methane project, Sunshine said it had completed drilling of the Lacerta-17 core-hole, with the well establishing a northwestern limit to the Lacerta gas field.

The Mitchell Rig 123 had moved to the Lacerta-37 site, spudded the well, and was coring ahead at 210m.

Sunshine said the Lacerta Pilot-1 continued to flow gas during the past week, with all four wells now back online and producing following selected workover activity.

Downhole equipment for the Lacerta-30 single well pilot (Pilot 5) had been installed, with the well now expected to be online.

Lacerta-30 was the first of four one-well step-out pilots designed to assess the productivity of the coal seams within the permit, the company said.

Sunshine said it was waiting on feedback from the reserve certifier, MHA Petroleum Consultants, and that further detailed operational updates at Lacerta would follow field development milestones.