The Mahalo 3 well in Queensland’s Bowen basin in Australia has returned positive well results in terms of thickness of coal intersected and permeability across the main coal reservoir section, Comet Ridge Ltd. reported.

The well lies approximately 260 km (162 miles) west of Gladstone in central Queensland and was drilled to target the shallow Bandanna formation.

The Mahalo 3 well reached a total depth of 300 m (984 ft) on July 19, intersecting a total of approximately 8 m (26 ft) of net coal, with 7 m (23 ft) of this coal in the main Castor-Pollux seam. The Castor-Pollux is the target of the reserves booking plan being executed by the joint venture.

Analysis of flow testing in Mahalo 3, conducted over this main seam, has shown the Castor-Pollux to have sufficient permeability to enable the well to be utilized for pilot production. Accordingly, production casing has been run and cemented in place with the rig being released July 21.

Mahalo 4 was due to be the next well in the four-pilot well drilling sequence; however, due to unseasonal rainfall in the area, the well drilling sequence has been modified to drill the driest sites first.

Subsequently the rig was moved to Mahalo 6, and this well was spudded July 22. Mahalo 6 has a planned total depth of 300 m (984 ft) and is also targeting the Castor-Pollux seam in the Bandana formation.

Comet Ridge Managing Director Tor McCaul said “the joint venture was pleased with the well result and it was a great start to the pilot drilling program at Mahalo.”

Comet Ridge has a 35% interest in ATP 337P Mahalo, having divested a 5% interest in the asset in late 2011. Under the terms of that divestment, Stanwell Corp. will fund Comet Ridge’s future expenditure at ATP 337P Mahalo up to US $8 million. Stanwell has an option to purchase Comet Ridge’s equity in the Mahalo block, based on 2P reserves booked, under an agreement initially announced in September 2011.