The analysis, which was taken over four drill stem tests from the two wells by US-based Sproule Associates, interpreted coal permeability between six and 56 millidarcies. Comet Ridge said these levels were similar to those recorded at other producing CSM developments in Queensland.

Permeability, the measure of how well a coal reservoir can flow gas and water, is determined by analysing the pressures recorded down hole during a drill stem test.

This pressure data is analysed by the reservoir engineers to determine the permeability and to also indicate any damage during the drilling process.

The level of permeability encountered meant several well completion options were available and inexpensive stimulation could be used to achieve commercial production rates in higher permeability zones, Comet Ridge said.

Each of the tests showed drilling induced formation damage, as indicated by a positive skin factor.

Currently all coal cores are undergoing gas desorption analyses, with final results for gas contents and saturations expected in the coming months. But Comet Ridge said these early observations were encouraging.

Mira-1 and Humboldt-1 were drilled to verify the thickness, gas content and permeability of the Permian aged Bandanna Formation coals in the eastern part of ATP 337P.

As reported last month, the Mira-1 core hole intersected eight metres of Bandanna coal, after drilling reached a total depth of 252m. Meanwhile, about 5.5m of Bandanna coal was intersected in Humboldt-1, which was drilled to 253m.

Mahalo-2, the third well in Comet Ridge’s Phase II earning program, is due to start drilling mid-year, after the joint venture decided to source a different rig. Following completion of this well, Comet Ridge will own a 40% majority interest in the project, with CSM majors Santos QNT and Origin Energy each owning 30%.

Mahalo-2 will initially be drilled to a point immediately above the Bandanna Formation coals to assess its productivity and provide initial reserves for the project.

The company said the three wells – Mira-1, Humboldt-1 and Mahalo-1 – would fulfil its earning obligations, entitling Comet Ridge to a 40% interest, with Santos and Origin Energy each owning 30%.

The Mahalo Project, about 100km north along a structural trend, targets the same productive coal seams as those produced at the Spring Gully and Fairview CSM gas fields in central Queensland.

The Spring Gully and Fairview CSM gas fields contain 1300 petajoules of proven reserves and 1947PJ of proven and probable gas reserves.

The Northern Denison Trough gas pipeline, part of the Wallumbilla-Gladstone pipeline, passes through the western edge of ATP 337P.