At Annandale, the company has finished drilling and completing three pilot wells, two of which are now producing gas seven days after dewatering started. At South Walker, CH4 has finished analysing a 3D seismic survey, and is completing an exploration and pilot-testing program.

Each project is targeting several seams of the Rangal Coal Measures, which overlie the Moranbah Coal Measures.

CH4 said each of the three wells at Annandale, which is about 20km east of the MGP, were drilled to a depth of about 300m and were then intersected by a single lateral well 1000m in length.

The company said all three wells were at this stage performing similarly to its MGP wells that targeted the Moranbah Coal Measures.

At South Walker, a 100 square kilometre seismic program has outlined an area of similar dimension and apparent geological continuity as encountered at the company’s MGP, 40km west, it said.

The company says a series of exploration holes indicated the area had significant potential.

A pilot well, drilled vertically to a depth of 300m and intersected by a single lateral well 500m in length, has recently been completed. Production testing has started on one of the three target seams in the area.

CH4 said this program was targeting the delineation of an area and gas volume similar to the MGP.

Earlier this year, CH4 said Moranbah was now Australia’s largest coal seam gas-producing project, following almost 13 petajoules of production in its first year of commercial operation in 2005 and daily production rates of more than 41 terajoules per day.

Last year, about 12PJ was delivered to Queensland Government-owned Enertrade to supply the Transfield-owned 230MW power station at Yabulu. A further 1PJ was delivered to Ergon Energy’s 12MW Moranbah Power Station.

A total of 17PJ is planned for delivery this year and about 20PJ for 2007.