Molopo said yesterday the five-well production pilot at Stratford included the previously drilled LMG03 and four new part-cored wells.

Drilling of the new wells was expected to start today.

The Stratford pilot had been designed by the Gloucester joint venture to establish reserves across the basin, and to ascertain production capabilities before any development decision.

The implementation of the Stratford pilot, which would be completed by the end of 2007, included drilling and multi-seam fracture stimulations of four wells.

It also included drilling a new pressure monitor hole and installing pressure monitoring equipment in two existing exploration holes, Molopo said.

Molopo said the Stratford pilot wells would be drilled between about 500-800m total depth, completed and perforated across selected major coal seams of the Gloucester Coal Measures, then fracture stimulated before being placed on test production for up to 12 months.

A total coal thickness of between 30-60m is expected.

The PEL 285 permit is about 100km north of Newcastle, where gas prices are expected to exceed other major east coast markets such as Sydney and Brisbane, Molopo said.

The permit covers an area of 1050 square kilometres, with over 200sq.km of prospective coal measure sequence.

Lucas Energy, a subsidiary of AJ Lucas, holds a 70% stake in the permit and is operator; Molopo holds the remaining 30%.