The Netherland, Sewell and Associates Inc report says that initial estimates are: 1P (proved volumes) 14.9 billion cubic feet; 2P (proven and probable) 170.2Bcf; and 3P (proven, probable and possible) 359.2Bcf.

In addition, another 166.2Bcf in possible contingent resources has been identified.

The certification identifies a potential 525.4Bcf of recoverable gas (3P plus contingent resources) from a mapped volume of about 1.6 trillion cubic feet of gas in place.

The current exploration data, on which NSAI has based its assessment, covers only part of the Gloucester Basin, which lies in the Upper Hunter Valley, north of Newcastle.

"As the exploration program is expanded, this should lead to additional areas being included in future reserves certification exercises," Lucas and Molopo said.

The partners currently estimate the overall gas-in-place potential for the basin to be in the range of 2.5-3Tcf.

The companies said they expected a reserves upgrade to be announced in late 2008 or early 2009 once further exploration results were available and the production performance data was available from the recently expanded pilot - which has five new production test wells.