The company now has a Dallas, Texas office staffed by top-notch American explorers and most of its technical work is now done in Texas. It has drilled producing wells and is watching its revenues and reserves steadily grow, said managing director Howard McLaughlin.

“US gas prices are three to four times higher than in Australia and will keep rising because demand is growing rapidly and supply is steadily declining,” he said.

The US also offers other advantages, according to McLaughlin.

There are many independent exploration opportunities, including large prospects that can add considerably to material reserves. Transportation and pipeline infrastructure are excellent, production lead times are short, costs are low, and the fiscal regime is attractive.

Gas exploration is also relatively low-risk, McLaughlin said.

“People tend to see the US as a mature market and wonder why the gas hasn’t already been found,” he said.

“But US gas prices were low until the late 1990s, so only large, shallow gas reserviors tended to be exploited. In many oil wells drilled in the past, gas zones were ignored and gas reservoirs that showed up on seismic were also ignored as companies preferred to invest in oil prospects. In addition, poor drilling technology in the past damaged many productive zones that can be produced using modern mud systems and better technology.”

So re-entering old wells and re-examining old seismic can give small companies a low-cost, low-risk entry into the US gas market, he said.

The only big drawback is that the booming US gas sector has made drilling rig availability restricted and unpredictable. But even so the potentially huge rewards for small to mid-sized companies make any difficulties seem trivial, McLaughlin said.

“We anticipate with a few more successes in the US, we can add 50 to 100% to our current production in the next 6 to 12 months.”

Antares’ US assets include the Ellis and Yukon prospects in Oklahoma, and the Wilbeck and Porter’s Creek blocks in south Texas.

Successful wells have been drilled at Ellis, where Ellis-1 and 2 are already producing and linked to the Oklahoma sales gas grid.

Ellis-1 and 2 are producing strongly out of secondary zones, and unexpectedly high volumes of gas from a secondary reservoir in Ellis-2 well in Oklahoma could boost the company's net revenue by up to 50%, he said.

The company expects flow rates of between 2 and 3 million cubic feet per day from this zone during the production testing phase until it has a better understanding of the reservoir and optimal production rates, according to McLaughlin.

The wells have discovered three hydrocarbon-producing zones but pressure differentials mean they can only produce out of one zone, he said.

Additional wells will be drilled to access the other zones, but it was hard to give dates for further drilling as rig availability in the US was restricted and unpredictable.

“Our short term plan is to develop the Ellis area over the next two to six months, to drill two farm-in wells as the Wilbeck and Porter’s Creek prospects in south Texas, and to begin drilling of the Yukon trend on the Oklahoma panhandle region,” he said.

“But we have to be flexible and ready to move at any time, because we just don’t know when we can get the rigs.”

Antares has responded to this situation by preparing all its current potential drilling sites so that if a rig becomes unexpectedly available work can start immediately, and by trying to contract multiple rigs to drill multiple wells.

So now it is a waiting game, but McLaughlin can’t hide his eagerness to drill more wells as soon as possible.

“We have a 50-70% chance of success at our south Texas and Oklahoma prospects,” he said.

“In the context of our market cap, we are looking at big returns. The value of our new reserves could well exceed our current market cap [about $96m at the time of going to press].

“The rewards are high and the risks are low – a lot of US wells have multiple zones, so you can often find enough gas to pay back the well even if the primary zone is dry.”

Market analyst Carmichael Research agrees that Antares is in a good position

“We are initiating coverage on AZZ with a BUY recommendation,” resource analyst Adam Conigliaro wrote.

“We believe the risks are on the upside as drilling intensifies on Ellis County and other projects over the next six months. AZZ is trading at a discount to our $0.84/sh base-case valuation.”