The development study for Douglas covered a range of technologies for development to identify several “viable economic options”, Rift said.

Two options involve major long-term markets, with a third option to exploit a small-scale, near-term commercial opportunity.

Non-executive chairman Ian Gowrie-Smith said Rift was actively pursuing all three options.

“New technologies, combined with the advantageous location of the Douglas gas field, with respect to access to regional markets, mean there may be genuine opportunities to commercialise our discovery completely independently of any other gas projects proposed in PNG,” he said.

“Douglas was the first discovery made in PNG under the new and more advantageous fiscal policy introduced in 2003, and we intend to be the first new field to achieve commercialisation.”

Seismic work from last year confirmed drilling locations in the northern sector of the Douglas gas field and also identified the nearby Puk Puk prospect as an exploration target.

Specialised seismic processing has begun to see if it can predict the presence of hydrocarbons elsewhere in Douglas or in Puk Puk.

Gowrie-Smith said the company planned to negotiate the principal terms and conditions for commercial agreements and establish enough gas reserves to support commercialisation during 2007.

“Initially, this may require the drilling of two further wells – an appraisal well on Douglas North and an exploration well on Puk Puk, as well as the flow-testing of Douglas-1,” he said.

The joint venture-owned drill rig is being maintained for this next phase.

Rift closed down 5.2% or 0.19p overnight at 3.55p.

Rift operates Douglas and holds a 65% stake in the licence, while New Zealand's Austral Pacific Energy holds 35%.