"PPL 2 recognises that Sydney Gas has met all necessary government conditions in respect to its next batch of three production wells within its Camden Gas Project," said the emerging coalbed methane player. "Sydney Gas is able to produce and sell significantly more gas into the NSW market.

"These new production wells are connected to the Ray Beddoe Treatment Plant and the gas will be sold to AGL Wholesale Gas for distribution into Camden and its environs."

SGC chief executive Dr Bruce Butcher said the company is keen to expand its drilling activities by accelerating our development of the Camden Gas Project.

"It is our intention to be producing and selling gas from up to 40 wells within Stage II towards the middle of next year," he said.

"That, we believe, could generate revenues in excess of $10 million (on an annualized basis) and put us into a positive operational cash flow position for the very first time."