This follows the completion by Molopo of the company's latest capital raising which has generated $4 million, much of it for the ongoing development of Molopo's Queensland gas reserves.

"We are currently assessing how many wells will be involved in the second stage but we hope to be in a position to commence drilling the first batch of wells from July," Molopo's managing director, Stephen Mitchell, said yesterday.

"These will be able to be brought into production at a much faster rate than those for the first stage, as all field, compression and processing infrastructure for our gas production is now in place," Mitchell said.

Molopo moved to gas producer status and its first revenue streams in March this year with an entitlement to 37% of production of coalbed methane gas from the first stage development of the Mungi field in PL94 in the Bowen Basin.

The company recently announced that production from the first stage is averaging around two terajoules per day.

"A final decision on the Stage Two program should be reached this month," Mitchell said.

"Molopo expects to spend up to $3 million on these new development wells at Mungi, whether it be financing 5-6 wells in our own right or a share of 20-24 wells should our partners in the field all wish to participate in stage two."

Under the placement completed yesterday by the company’s financial advisor, Melbourne Capital Limited, Molopo issued a total of 73.5 million new shares to sophisticated and institutional investors to raise $4.04 million.

Part proceeds from the capital raising will also be used to appraise Molopo's other gas interests in the Harcourt and Lilyvale gasfields in Queensland and the Clarence Moreton and Gloucester Basins in New South Wales.

The Mungi gas field is currently under development by the Joint Venture partners, Origin Energy (50%), Molopo (25%) and Helm Energy-Australia LLC (25%).