Petsec yesterday unveiled plans to develop the Vermilion 258 lease with is located 114 kilometres (70 miles) south of Vermilion Parish, offshore Louisiana.

Petsec's rubber stamping of the field follows the successful drilling last month of the Vermilion 258 #1 well which encountered six hydrocarbon bearing sands with an estimated net gas pay of 24 to 29 metres (78 to 95 feet). It is currently drilling a second well from the same surface location to test a further four target sands.

Petsec's executive chairman, Terry Fern, said production from the Vermilion 258 lease was expected to commence mid-year following the US$7.8 million installation of a platform and pipeline capable of handling up to 45 million cubic feet of gas per day.

"Depending on the outcome of the second well, initial production is expected to be in the range of 15 to 25 million cubic feet of gas per day," Mr Fern said.

"The production facilities can easily be modified to accommodate increased production from any further success with additional wells scheduled for drilling this year."

Company secretary Geoff Fulcher said the production jacket had been sourced from the huge second hand infrastructure market in the Gulf area, which meant the field could be brought on line within the six month time frame.

"There is also a transmission line through the permit, so all we'd have to do is build a small interconnect, he said. Petsec recently raised $11.6 million in anticipation of the development.

Petsec brought the West Cameron field into production at the beginning of 2003, marking the start of its turnaround from near bankruptcy in the late 1990s after becoming over extended.

The company has a 100% working interest and an 83.33% net revenue interest in the Vermilion 258 lease.