According to managing director Richard Cottee, "Gas flow rates from the pilot rose sharply in the last week to more than 130,000 cubic feet per day and results from new wells indicate that the best is yet to come from QGC.

"These results give us confidence that we have reached a critical level for de-watering and that we are on track to achieve reserves certification for the CS Energy gas sales contract later this year.

"Indeed, we are sufficiently encouraged by the results that we have begun marketing additional gas quantities to other customers," Mr Cottee said.

Gas flow rates increased by nearly 30% in the last week from the six operational wells at the Berwyndale South pilot near Chinchilla in Queensland.

Mr Cottee said results from wells two and four kilometres away from the original pilot have provided encouraging news about the quality and size of the field.

"The core samples showed the highest gas contents of any coals sampled by QGC to date, at 237 standard cubic feet per ton, with superb permeability and a high level of connectivity with the original pilot.

"It is likely these factors will allow for a much more economic delivery of gas to our customers than previously envisaged," Mr Cottee said.

The company has also reached an initial agreement for a tie-in to the Roma to Brisbane pipeline and the original five well pilot has been expanded to eight wells, with six wells currently pumping and two awaiting installation of high capacity pumps.

Based on these results, QGC has revised its estimate of gas in place resource in the proposed Berwyndale South development area to 6.8 billion cubic feet per square km (dry ash free). Using an implied recovery rate of 50%, this would indicate that this area contains recoverable resource of 183 billion cubic feet of gas, or 193 Petajoules - easily enough to fulfil the CS Energy contract.

On the back of this good news, QGC announced a Share Purchase Plan yesterday, giving shareholders an option to purchase up to $5,000 worth of new shares at 15 cents per share.