Odyssey said the Kenilworth Railroad 1-A well was designed to appraise multiple conventional gas reservoirs beneath the established Ferron coal seam methane play.

If the conventional test failed, the joint venture had decided use it as a water disposal well for the project.

However, Odyssey said that during drilling, the well encountered high pressures and gas shows in a number of these conventional reservoirs, including strong gas shows in a 50-foot sand in the Morrisson formation at a depth of 5550 feet.

Subsequent testing resulted in an initial flow rate of 1.5MMcf, with the well now completed and tied into the project's production infrastructure and selling gas.

Odyssey said while the full significance of this discovery was not yet known, KRR 1-A was the first productive well from the Morrison sand within a 50-mile radius.

As a result, Marion - as operator - believes that the play has the potential to extend over 3800 acres of the central part of the North Helper gas project.

Odyssey's managing director Mark O'Cley described the result as a particularly important development for the project.

"Having established an extension to Anadarko's Helper coal bed methane gas field in the project in 2006¬-07, the company has long seen the potential for shallower conventional gas discoveries as being developed by our competitors to the north and east, and the potential for significant deeper gas discoveries in the southern and central parts of the 29,000-acre project," he said.

While Odyssey did not participate in the drilling of this well, it intends to back-into the well under the JV operating agreement.

Stakeholders in the North Helper project are Marion, as operator with a 48.75% interest, Odyssey with 30%, Pegasi Energy (10.625%) and private interests (10.625%).

In related news, Marion Energy was admitted to the S&P/ASX 300 last Thursday, along with Queensland explorer Sunshine Gas.