WestSide said the $10 million program would take place on two of the four tenements belonging to Sunshine in which it has farmed-in to earn a 50% interest.

The partners will initially drill three vertical pilot wells at the Paranui project in ATP 769P, then two at Tilbrook in ATP 688P. An observation well will be drilled at each site.

Depending on preliminary results, the JV will then drill two more wells at Paranui.

WestSide chief executive Steve Cullum said each program would provide additional information about the nature of the coal resource and different well-completion designs.

“We are expecting a relatively early gas response from the Paranui wells, which will be fracture stimulated to enhance productivity,” he said.

Once drilled and completed, the pilot wells will be dewatered and production tested for to assess their commercial viability.

Cullum said suppliers had been sourced for most of the critical and long lead-time equipment, consumables and support services.

“Site preparations have commenced at Paranui and agreements are either completed or at an advanced stage with the relevant landowners for access, and traditional owners for cultural heritage protection,” he said.

Looking ahead, the partners are planning core hole drilling and seismic surveys in the third quarter at Foxleigh in ATP 811P, Cullin in ATP 693P and potentially an additional area of interest in the Paranui tenement.

“Consistent with our objective of reserves expansion, we are also reviewing additional opportunities to expand our access to gas reserves,” he said.

WestSide listed in January after raising $29.5 million through an initial public offering to fund the development of its CSM and downstream ammonia production operations.

The company has said it believes the ammonia market will continue to strengthen in the region as demand for ammonia nitrate increases along with the demand for ammonia-based fertilisers.