In its quarterly report, the Melbourne-based company said preliminary gas content analysis and intersected coal thickness from the first corehole in the program, Weismantel-1, suggested the southern area of the PEL 285 permit had CSM potential.
The permit is about 100km north of Newcastle, where gas prices are expected to exceed other major east coast markets such as Sydney and Brisbane.
Molopo and partner AJ Lucas have capped and suspended Weismantel-1, while it awaits final results from gas content and composition testing, expected this quarter.
Last month, Molopo spudded the second corehole, Craven-1, to investigate the CSM potential in the central basin area. At a depth of 515m, drilling will continue to 900m.
Depending on results from the four planned exploration holes, Molopo and AJ Lucas have agreed to spend up to $15 million over the next 18 months appraising the area with a further 13 exploration holes, three production pilots - each containing five wells - and more aeromagnetic work and seismic.
Also in PEL 285, the company said it continued negotiating land access and approvals to establish the Stratford production pilot. It expected drilling for the production wells to start later this quarter.
The Stratford prospect is geologically defined by nine cored CSM wells in the Gloucester Coal Measures, which identified an estimated 90 petajoules of gas in-place within its 5 square kilometre area.
