The earlier estimate was derived from Fortune Liulin Gas, in which Molopo holds a 40% stake.

Then in January, an independent geological study completed by the Shanxi Coal Bureau - the government institute responsible for most of the region's coal geological analysis - estimated the block contained around 1.4Tcf of gas in-place.

In a statement released yesterday, Molopo said it expected to recover three times more gas than previously expected through the use of horizontal well-based development methods.

Vertical fracced well development techniques would have only been expected to recover 30-40% of the in-place gas reserves, compared with horizontal techniques at 50-70%.

The joint venture is currently dewatering two vertical wells and has plans to drill a further three exploration core holes as well as a horizontal pilot program.

Almost one year ago, Molopo transferred its rights in the Liulin CSM production sharing contract to Fortune, a new incorporated JV company.

Fortune is 40%-owned by Molopo and 60% by JV partner Fortune Oil, which is funding the first $US2.5 million ($A3.3 million) of work at the Liulin project.