This follows an announcement by Blue earlier this week that it was one of several companies interested in a merger or joint venture with troubled CSM producer Sydney Gas.

Blue Energy told the market yesterday that ground preparations were underway for the Cobalt 2D seismic survey in Bowen Basin permit ATP 854P, east of the town of Injune, central Queensland.

Following this shoot, Blue will undertake the Indigo seismic survey in the Surat Basin’s ATP 818P, east of the town of Goondiwindi, which lies on the Queensland side of the NSW-Queensland border.

Both tenements are 100% owned by Blue Energy.

Blue’s managing director Sharif Oussa said 75km Cobalt survey is designed to appraise the extent of an “encouraging” geological structure seen on existing seismic at the level of the Permian coal-bearing Bandanna Formation.

Blue said the resulting data would direct exploration core drilling and eventual pilot development to appraise CSM potential of the Bandana coals on the Cobalt structure.

Expected to take a week to complete, the Cobalt Survey will be followed by the Indigo survey, which would assess the Jurassic Walloon coal measures that are highly productive for CSM in other parts of the basin.

Similar to ATP 854P, the 75km seismic survey results will be used to direct future exploration in the tenure, including core drilling and eventual pilot development.

Acquisition of this seismic survey is also expected to take one week.

Blue Energy holds, or has joint venture interest in over 28,000 square kilometres of Queensland exploration acreage, over 12 leases in the Bowen/Surat, Galilee, Clarence Moreton and Maryborough Basins, considered prospective for CBM and conventional petroleum.