The company yesterday said the first well in its current prgram had reached a total depth of 436m below the Kelly Bushing (KB) and intersected the primary target Walloon coal seams in line with prognosis.

Wireline logs have been acquired and the coal seams of interest under-reamed as planned, it said.

Drilling encountered good gas shows and encouraging water production from the seams.

Sunshine said production casing has been run and the well will now be suspended pending installation of pumps and surface facilities to allow the seam to be dewatered and production tested.

The four-well pilot program is designed to test the productivity of the Walloon Coal Seams identified in the Lacerta core-hole program conducted by Sunshine Gas earlier this year.

The target seams at Lacerta produce gas in the adjacent Coxon Creek CSM field. Once drilled and completed, the Lacerta pilot wells will be placed on extended production test to dewater the coal seams and determine whether the subsequent gas flows are economically viable.

These tests will also provide data towards Lacerta’s reserve certification program.

Each pilot well is expected to take about six days to drill, case and suspend.

Sunshine reiterated that it currently believes the CSM project contains some 230 billion cubic feet of contingent gas resources.