"Preliminary results have been in line with pre-drill expectations, and wells to date have showed strong free gas flows to surface during clean-up," managing director Tony Gilby said.

"These early results are an endorsement of the new completion technique the company has been developing throughout our appraisal drilling program."

Gilby said Sunshine had employed a new well completion technique to optimise gas flows from the Walloon coal seams.

The company also said it is preparing to spud CS47, the fourth of 40 wells planned in the field, with the Mitchell Rig 101 currently mobilising to the well site.

Sunshine also hopes to have two rigs running for most of the development

program with Mitchell Rig 141 expected to arrive onsite in July.

The wells are then expected to take five days to drill, under-ream, log and complete.

Meanwhile, Sunshine also said Front End Engineering Design (FEED) work is continuing for the Lacerta gas processing and compression plant.

Gilby said FEED work is expected to be completed in late August with plant commissioning on track for completion in the June quarter of 2009.

Phase 1 of the Lacerta CSM development plan is targeting production of 4-8 petajoules of gas a year to support domestic sales while the company advances its SUN LNG project at Gladstone with Japanese partner Sojitz Corporation.