During the three months to 31 December 2003, QGC started testing its Argyle wells in ATP620P, recording gas flows of up to 427,000 cfd from its Argyle #4 well, along with increasing gas flows of over 140,000 cfd from two other Argyle wells.

The company also drilled three core wells, with the Argyle #6 well confirming that the Argyle wells are located in an area where coal seams have both high gas contents and high permeability - ideal conditions for commercial extraction of coal seam gas.

At its Berwyndale South Project QGC returned the pilot wells to their original configuration following a three month test of individual coal seams. Testing of the pilot is continuing, with the target to deliver first gas to market in early 2005 after the initial technical feasibility study of the Berwyndale South field development was completed.

Additionally QGC formed a new joint venture with AJ Lucas Group, the long-distance pipelines and horizontal drilling technologies specialist, through a farmout of a portion of ATP651P.

Through the current quarter QGC will continue to test the gas flow rates of the wells, with the expectation of achieving an initial certification of commercial gas reserves within the next six months.

Along with its joint venture partner Pangaea, QGC is in the process of selecting an independent expert to certify the commercial gas reserves identified at Argyle for the purposes of marketing the gas to potential customers.