The company said it had achieved the significant milestone of proving stable economic gas flow rates from its Rougemont well within the Rolleston West project in Queensland.

It has claimed it was able to produce about half a terajoule of pipeline quality gas a day with improvement possible.

“The Rougemont nose is gradually unlocking its secrets and I have no doubt that further analysis of reservoir dynamics will enable to us to further optimise production when we recommence testing over the coming months,” Cottee said.

“Given the uncertainty surrounding domestic gas production this discovery has come at an extremely fortunate time.”

He said the company was excited by the prospects at Rougemont and that its assumptions of high gas production levels had been substantiated.

“These exceptional test results provide an excellent foundation for establishing a substantial gas reserve in the area and accelerating development of a substantial gas project in the region.”

However, the results won’t be immediate.

State Gas said it would close down the well for a short period to do further pressure testing and gain a better understanding of the of the reservoir dynamics.

“Armed with this knowledge State Gas’ intention would be to re-open the well in conjunction with relocating gas facilities to a location which can support both the Reid’s Dome and Rougemont projects.

“The decision to close the well in the short term has the additional economic benefit of preserving the high-quality production-testing gas until it can be captured for sale.”