ATP 768P licence operator Sunshine Gas told the Australian Stock Exchange today that the farm-in program would be designed to test the prospectivity of deeper sandstone targets that had not yet been intersected by existing wells.

ATP 768P is located immediately north of the Scotia Gas Field and covers an area of around 4000 square kilometres, with the Champagne Creek field some 20km north of the township of Taroom.

“We are delighted to have Beach join us in the Champagne Creek project area and note that this agreement will add significantly to Beach’s current eastern Queensland acreage position,” Sunshine managing director Tony Gilby said.

The involvement of Adelaide-headquartered Beach provided “further acknowledgement of the potential’’ of Sunshine’s acreage, he added.

“In combination with the recently announced agreements with Avery Resources (ATP 789P) and Westside Energy (ATP’s 769, 693, 688 and 811P), it demonstrates the active exploration and appraisal program now in train across Sunshine’s acreage portfolio with the objective of production in the near term.”

Gilby said Sunshine aimed to start drilling operations under the agreement with Beach in the third quarter of this year.

Last October, Sunshine said higher-than-expected gas flows from the Champagne Creek-3 well – 700,000 cubic feet per day through a one-inch choke – boded well for the future development of pipeline-grade gas of 98% methane and 2% nitrogen.