Drill stem testing of Daniel-1 confirmed the presence of high permeability within the Walloon Coal Measures and gas flow to the surface.

Preliminary core and log analysis indicates the well encountered about 30m of net coal while preliminary results from samples taken for gas desorption testing indicates it has similar gas contents to the earlier Holli-1 and Cameron-1 wells.

"This positive result for Daniel-1 significantly expands the northern extent of both the Juandah and Taroom Coal Measures in this permit," managing director Steve Beardsall said.

"Twenty of the thirty meters of net coal were in the Taroom Coal Measures, which we believe extend over most of the permit. This is further encouragement for prospective pilot and development work in this permit."

The fourth well, Gerard-1, will further test the northern extent of the Taroom Coal Measures over the permit. If it is successful, Gerard-1 could establish a 700-square-kilometre area of CSM potential.