In its June quarterly report the company said gas flows from the pilot doubled over the quarter with aggregate gas flow rates increasing to more than 300,000 cubic feet per day from seven wells. Water production also increased by 25% to around 10,000 barrels per day.

QGC has lodged a petroleum lease application covering 66 square kilometres with the Queensland Department of Natural Resources and Mines - it believes at an expected 50% recovery rate, the area will be able to produce about 240 petajoules of gas. This is far in excess of the 90 petajoules required to supply partner CS Energy under the existing gas supply agreement.

"The engineering technical feasibility study for the full-field development progressed during the quarter with the conceptual design review for the surface facilities now complete," QGC said.

"The original five pilot well was expanded to eight wells during the quarter, with seven wells now completed and producing gas.

"A new core well and step-out well were also completed. Berwyndale South #6 will be completed for production in August."

BHPB can now earn 50% of the project by investing up to $5 million in two key blocks of ATP 632P, replacing the previous deal where CS Energy farmed in.

Under the terms of the initial farm-in agreement, QGC received $500,000 upon signing the JV agreement and CS Energy will fund QGC's share of future expenditure in the Berwyndale South project, up to $4.5 million.

A new framework agreement for the BHPB structure is still to be drawn up.