Arrow said the Mitchell Drilling Rig 101 moved on to the Kogan North site over the weekend and spudded the first well in the 30-35 well drilling programme on Monday.

JD Drilling Rig 15 will also be moved on to site before the end of February and, with two rigs working, it is anticipated that development drilling will be completed in approximately five months.

Arrow said this project – the only CBM project in the Surat Basin so far to enter development – would help Arrow become the first Surat CBM producer to receive gas sales revenues.

This project is to supply 4 PJ of CBM per annum for 15 years to the Queensland government subsidiary CS Energy’s Swanbank E power plant, located near Ipswich, with gas transported to Swanbank via the Roma-to-Brisbane pipeline.

Arrow operates the A$25 million Kogan North development, which it holds in an equal partnership with CS Energy. First sales gas from the project is due in September.