At the time of suspension the LMG03 well was producing in excess of 280,000 cubic feet of gas per day, despite having been on pump for only two weeks. Water production had reached approximately 180 barrels of water/day.

Gas production was still increasing when the well was suspended with the water level sitting at only 80m below the surface. The lowermost target seam in the well occurs at 405m from surface.

David Casey, an executive director of Molopo and the project manager said that initial production results were extremely encouraging, however, continued long term testing was still required to confirm the ultimate potential of this well.

“The connection of the boreholes to our gas well over such a short time frame and particularly given the small pressure reduction in LMG03 is an indicator of very good reservoir connectivity,” he said.

The neighbouring boreholes that are producing gas were drilled as part of previous coal exploration efforts and do not appear to have been plugged. Casey said that testing had to be suspended to allow these wells to be cement sealed.

It is anticipated that testing will recommence in the next three-to-four weeks after all wells likely to impact future testing are plugged.

The LMG03 well, situated within the Stratford prospect, was completed across four coal intervals representing a net coal thickness of up to 23m.

The well is one of two production wells at the Gloucester Basin permit as part of the Phase 1 work program, the second well (LMG02) using the surface to in seam lateral well technology.

The Gloucester Basin permit is located 100km north of Newcastle with AJ Lucas Coal Technologies holding a 75% interest and Molopo Australia the remaining 25%.