HCO6 was drilled to a total depth of 996m and intersected net coal of 35m within the Upper Permian Newcastle Coal Measure.

Sample cores from the corehole in PEL 4 are undergoing the full desorption process to determine the gas content, gas composition and gas saturation values, Sydney Gas said.

This will enable the joint venture to ascertain the CSM production potential of the respective seams in the Newcastle Coal Measures, the company added.

The well has since been plugged and abandoned after logging of geophysical data for lithology identification.

Sydney Gas then moved to PEL 267, to spud the Rothanal 01 corehole on June 13.

Rothanal 01 is about 15.6km southeast of Singleton in the Hunter Valley and will target the Lower Permian Greta Coal Measures.

The corehole has an estimated total depth of 920m and first coal is expected at 780m.

The JV has already drilled three coreholes in its initial 10 corehole drilling program to prove up potential 2P (proven and probable) reserves.

According to Sydney Gas, the partners are planning an extended corehole program in both PEL 4 and 267 to prove up additional 2P reserves for commercialisation.

To speed up the drilling program, a second coring rig is expected to be commissioned in mid July, Sydney Gas said.

The JV is also planning a 2D high-resolution seismic survey later this year to acquire a minimum of 160km data to define the geological subsurface structures, and lateral continuity of the targeted seams in the Hunter region.

Sydney Gas is operator and has a 50% stake in exploration activities in the Hunter region. AGL Energy has the remaining 50%.