Drilled to a depth of about 914 metres, the targeted Devonian Shale could provide up to 252m of potential gas-producing interval, the company said.

The now perforated and fracced wells are expected to produce average open flows of 130,000 cubic feet of gas per day. In addition, the company said high bottom hole pressures had been recorded in the wells.

Overall, Joe Salomon said the company was pleased with the result, given the high gas prices in the United States.

“While the flow rates have been a little less than expected, the wells show a consistent capacity to produce gas and the current gas prices of between $US11 and $US12 are at an all time high,” he said.

Given the flow rates, Salomon said it was likely another 100 wells would be drilled on the 10,400-acre project.

Since entering the US in November last year, Norwest has established a position in shallow low-cost gas projects in the Appalachian Mountains with acreage spread across three states – Tennessee, Kentucky and West Virginia.

Salomon told EnergyReview.net that Norwest’s US entry was strategic and calculated. Why keep exploring in Australia for $A2.50 per Mcf of gas, when the US promises nearly $A16, he asked. With continuing gas shortfalls forecast for the US prices won’t fall, so Norwest believes it’s picked a winner.

Salomon also alluded to the limitations and lack of opportunities in Australia for juniors such as Norwest to climb to the next tier.

“Most good areas in Australia are held by only a few of the big companies,” he said.

“Plus, there isn’t a commercial driver that forces a turnover of acreage as frequently as occurs internationally, like the US.”

Described by Salomon as “unconventional”, the Tennessee projects involve low-rate production from several inexpensive wells drilled into fractured shale. The primary aim is to establish long-term cash flow to underpin growth.

But with the industry in the midst of a boom, the company is falling behind schedule as it struggles to find enough drillers, lawyers, rigs, frac units and every other component of a standard operation.

Norwest holds a 37.5% interest in each of the five Tennessee wells drilled, with 29% new revenue interest. After drilling the first 20 wells and committing to another 20, the company will earn the same interest level in the whole project.

Other partners are project operator Tennessee-based Miller Petroleum Inc and Texan Golden Triangle Energy.