Bow, as operator, told the market yesterday that the JV would work closely with MHA to work out the best and cheapest program for testing, collecting data and evaluation of the Don Juan CSM area to be carried out next year.

This will be undertaken with a view to obtaining maximum commercial gas reserves certification by the end of 2008, Bow said.

The announcement follows news that the first exploration well in the region, Taringa South-1, was likely to produce pipeline quality gas at good flow rates.

Then yesterday, Bow said the second well, Orallo North-1, had intersected 9m of coal – including a 3m continuous seam – at a depth of 135-230m.

With a planned total depth of 420m, the well has been designed to determine coal thickness, gas contents and assess dewatering capability of the coals in the Orallo North area.

It is not expected to flow free gas.

The company also said it planned to case and suspend its initial exploration wells as future pilot production holes, to carry out flow and production testing.

Interests in the Don Juan joint venture are: Bow (operator – 45%), VicPet (45%) and Roma CBM (10%).