The Argyle program will test gas and water flow rates from four of the current wells, with a new core well, Argyle #6 to assess the gas content and permeability of the coals at the field.

The wells initially flowed up to one million cubic feet per day (cfd) in 2001 before being suspended pending settlement of a joint venture dispute. The production testing of Argyle is in lieu of the previously announced Lauren core hole in ATP620P.

With work due to commence immediately, QGC has increased its interest in the tenement, effectively buying back half of the interests that were to be acquired by Pangaea in March 2003 upon settlement of the dispute.

Subject to Ministerial consent, QGC will pay $375,000 to Icon Energy to increase its interest from 56.25% to 59.375% in ATP620P, from 63.75% to 70.625% in ATP610P and from 62.5% to 68.75% in ATP648P.

BHP Billiton will be entitled to up to half of QGC and Pangaea's interests in ATP620P and ATP648P if the proposed farm-in to these tenements is completed.

The new program aims to establish Argyle as QGC's second producing field, complementing its Berwyndale South pilot operations in the neighbouring tenement, ATP632P.

QGC expects to have final engineering design of the Berwyndale South gas field facilities completed (with certification of reserves) in the first quarter of 2004. It is anticipated that construction of the facilities will take six months, enabling first gas deliveries to CS Energy, its foundation customer, to begin in early 2005.

"Testing over the last few months has identified an efficient well design which should enhance the economics of the Berwyndale South Project, delivering cost savings of over $100,000 per well," QGC's managing director Richard Cottee said.