The test results showed a combined daily expected flow rate from both intervals of about 1.6 million cubic feet of gas per day, Livingstone said.

But analysis has determined the gas from both intervals has a high nitrogen content, which reduces the energy or heat rate (btu or British Thermal Unit) produced from the gas.

Livingstone executive director Craig Burton said the JV would investigate several alternatives to exploit the lower btu gas from the discovery.

“The most likely outcome will be to combine the Edge gas with higher btu gas discoveries elsewhere on our acreage,” he said.

“The forthcoming six-well drilling program is expected to yield higher btu gas discoveries that will assist production from the Edge discovery.”

Spudded in early December, the Edge 1-10 well encountered 48 feet of gross pay in the Forbes formation and 37 feet of gross pay in the underlying Guinda objective.

Livingstone said testing of the Forbes objective was delayed due to heavy rains preventing access to the well site. Once the testing program was able to restart earlier this month, it tested an extended flow rate of 1.2mmcfd from the primary Forbes target in addition to 400,000cfd recorded earlier from the Guinda formation.

“The Edge gas discovery in both the primary and secondary gas target and the combined flow rate is very pleasing,” Burton said.

“The higher than expected flow rate is offset somewhat by the lower btu, which will require blending or other alternatives to achieve sales.

“Once production is achieved, the well will be highly economic with a likely payback of less than six months.”

Burton said the JV believed that the high nitrogen content in the gas was unique to the far east of its current acreage position and represented a small fraction of the total leased acreage and identified prospects.

The Edge 1-10 well was designed to test the most easterly prospect on the leased acreage position.

The six-well drilling program planned for this year are in areas where wells already drilled by other operators indicate that nitrogen is not an issue, Livingstone said.

Orchard and Livingstone each hold a 50% interest in Edge 1-10 and the Forbes Gas Project.