Some oil has also been reported coming to the surface with gas and rock cuttings. The oil measures 46 degrees API.

"The original Tinker 2 well, drilled in 1989, flowed gas at only 400,000 cubic ft a day on test and was never completed as a production well. This is a 500% increase," said Dr Howard Brady, Mosaic CEO.

When using horizontal drilling, gas and oil flows to the surface through a 5.5 inch casing together with rock cuttings. As soon as practicable a work over rig will be contracted to install production tubing in the tinker 2H well. Full testing will then be conducted through 2.3/8 inch production tubing.

Brady said Mosaic's staff is rewriting more than 40 years of geological and technical history by using Horizontal Underbalanced Drilling and now estimates that the Tinker complex, covering 40sqkm, has a 3P resource with possible recoverable reserves of 60 billion cubic feet, with oil also present within the complex.

Mosaic is now to move on to the Tinker 4 and Lark 1 wells using horizontal coiled tubing drilling with nitrified liquids.

As in the first two wells, previously drilled wells will be used as (re) entry points to a depth of approximately two kilometres before the high tech coiled tubing system bends out horizontally up to 400m.

Adding to the company's good fortune is the fact that the Tinker Field, located in Queenslands Surat-Bowen Basin, is wholly owned by Mosaic and is already connected by a series of gas pipelines to Mosaic's treatment plant at Silver Springs.