“All wells drilled to date have encountered gas bearing coals and the company is pleased with the early gas flows,” Metgasco said.

“Progress on the drilling program to date has allowed the company to commence preliminary engineering for the proposed 12MW gas fired power station [mooted in a cooperative agreement with Country Energy].”

Gas flow testing has now begun at the first well, MSC-03, which spudded on 15 April and reached total depth of 684 metres on 28 April.

“Over the past two weeks, water in the well has been gradually drawn down,” Metgasco said.

“Free gas flows have been established while maintaining positive pressure on the well head. The confirmation of the presence of producible gas and the recording of these early gas flows is an important milestone in the establishing the commercial potential of the South Casino field.”

The rig has now moved back to the company’s second well, MSC-04, following completion of MSC-05. During the coming week, slotted liner will be run and the well completed, according to Metgasco. Before running liner, this well will be stimulated by air cavitation.

The third well, MSC-05, spudded on 4 May and reached total depth of 680 metres on 10 May. It has now been completed. Over the past week, production casing has been run to the top of the coals and the coals stimulated by air cavitation.

“This well has continued to produce significant volumes of free gas during the well clean-up process,” the company said. “Production test equipment will be installed during the coming week.”

Site works have now been completed in readiness to begin drilling MSC-06, the fourth well in the production test program. This well is 250 meters away from MSC-04 and Metgasco said it planned to start drilling within two weeks.