“This exploration and development programme will be funded from existing cash reserves and cash flow generated from the company’s operating fields,” said Petsec executive chairman Terry Fern.

“Production is forecast to be 7.0 billion cubic feet of gas equivalent in the 2005 year some 23% higher than the 2004 year.”

In 2004 Petsec focussed primarily on developing the Vermilion 258 gas field in the Gulf of Mexico, USA, and acquiring extensive oil and gas interests onshore Louisiana, USA.

But the 2005 budget includes a more active US exploration program of six wells onshore and offshore Louisiana, one well offshore China, a 3D seismic survey onshore Louisiana, a 243 square kilometre 3D seismic survey onshore USA, and a feasibility study and development plan for the 12.8 West oil field in China.

The seven-well drilling program will target potential reserves in excess of 25 billion cubic feet of gas equivalent (Bcfe), according to Petsec.

The 3D seismic survey covers the Moonshine Project, 50 miles west of New Orleans, an area not surveyed with 3D seismic before and close to gas fields that have produced 180 Bcfe.

The feasibility study and development plan for the 12.8 West oil field, a prospect of about 10 million barrels, is expected to be completed by mid year. Petsec Energy holds a net interest of about 1.25 million barrels.