The Perth-based company announced it has delivered gas to its first contracted customer, a privately owned power station in a nearby industrial area. Delivery to a second customer, this time an apparel manufacturer, is set for later this month after the installation of a regulating and measurement station.

Gas was discovered at the field, which is located about 150km west of Istanbul, late last year when Gocerler-1 flowed at a rate of 14.2 million cubic feet. Follow up drilling at Gocerler-2 saw more success with flow testing from a 17m section producing gas flow at 5.4 mmscfd with associated condensate. Brokerage house, DJ Carmichael, said it believes a total reserve of 130 bcf of gas is possible if all reservoir units are assumed to be productive.

Turkey is a nation of 65 million people, which relies heavily on imported gas. While demand is very high and gas prices are high (around $US4 per thousand cubic feet), only a fraction is met by local producers with the Russians supplying the bulk of the nation's needs.

With two production wells and a third development well expected to spud in February, Amity Oil and its joint venture partner, Turkiye Petrolleri AO (TPAO), have identified several large exploration areas in the Thrace Basin and plan to drill a wildcat well, Beyazkoy-1 in the near future.

"The company's pioneering role in the Turkish oil and gas industry places it in a favourable position to profit from new initiatives in that country," Mr Peter Strachan, senior analyst at Carmichael said. "Smooth commissioning of gas production in 2002 will re-rate AYO as a producer and AYO's low price may attract corporate action.

"An active exploration program will maintain investor interest, providing relatively low risk opportunities for major growth in value." Carmichael has given the stock a strong buy recommendation as it believes the stock is trading at just 43% of its assessed valuation of $2.10 per share. At time of writing, shares in Amity Oil rose 1c to 90c.