Netherland Sewell & Associates International (NSAI) had reported that Argyle's proved and probable reserves had increased from 67PJ to 133PJ as a result of the successful new Argyle East pilot.

The best well from that pilot, Argyle-11, last week averaged 946,000 cubic feet per day (cfd), with the highest daily production recorded as 1,065,000 cfd.

Argyle reserves were now sufficient to meet the requirements of the Incitec Pivot supply contract. But QGC managing director Richard Cottee said the company intended to optimise the reserves and economics before submitting a reserves report to satisfy the conditions precedent to the supply contract.

On Thursday QGC announced free-flowing gas at 700,000 cubic feet per day (cfd) from its Lauren-2 coal-bed methane well in Surat Basin lease ATP 620P. The nearby Lauren-1 well was flowing at a less impressive but still respectable 140,000 cfd.

The results were measured following drilling and clean-out operations, said QGC general manager exploration and technical services Ray Johnson.

The flows suggested another pilot could be justified at Lauren, and if these wells proved successful then QGC may be looking at a high-productivity gas field extending around the “Undulla Nose” from Argyle through Lauren to Berwyndale South, according to Johnson.

“The ability of the Lauren wells to free-flow without pumping is an added bonus in that it will significantly reduce the time required to test this pilot for commerciality”, he said.

Lauren-1 and 2 have been suspended awaiting workover rigs to run the pumps. Lauren-3 was spudded last week.

The Lauren wells are located 15km south-west of the Argyle East pilot and 10km southeast of the Berwyndale South pilot.

Lauren-1 well was originally drilled as a core well but will be completed as a production test well to test the seams of the upper Juandah Coal Measures. Lauren-2 will be completed as a production test well accessing all seams in the Juandah Coal Measures.

QGC and joint venturer, Pangaea Oil & Gas Pty Ltd (Pangaea) will now expand the Lauren testing program to three wells, with Lauren-3 to be drilled to test the deeper Taroom seams, Johnson said.

The three wells will comprise a three-well mini-pilot to be tested over the next few months.

Lauren-3 is the first planned Taroom coal seam test in ATP 620P and is being targeted based on high gas contents and promising drill stem test results from Lauren-1, according to Johnson.

“Lauren-3 has the ability to significantly impact the reserves growth of QGC through the isolated targeting of the Taroom coal seams that underly our present Juandah reserves," he said.