Arrow Energy yesterday reported its Tipton West coal seam gas field in Queensland's Surat Basin had been independently certified with 1086 petajoules of gas, making it potentially one of the largest single continuous onshore gas fields in Australia.
Chief operating officer Nick Davies said the 3P gas reserve certification was a milestone for Arrow Energy as an emerging gas producer.
"We knew that Tipton West was very prospective for gas, but this is a huge amount which has exceeded our internal expectations," he said.
"The outlook for Tipton West is very encouraging and we will be working hard over the next few months to confirm the commerciality of the field."
Mr Davies said Arrow expected to utilise the large gas field to fulfill a number of sales agreements already in place with BP, Wambo Power Ventures and Queensland government-owned electricity supplier Ergon Energy.
He said Arrow had extended its gas sales agreement with Ergon Energy to 3.2 petajoules per year, up from 2.7 petajoules per year.
"This increase is evidence of the strength of Arrow's relationships with key gas buyers in Queensland and the expectation of strong future demand for gas," he said.
"It also shows the increasing confidence that customers have in coal seam gas in general and Arrow's ability to deliver in particular."
Mr Davies said the increase had boosted the company's total committed petajoules under various gas sales MOUs to 14PJ per year, with Arrow's share at 10PJ per year.
"Arrow is an emerging player in coal seam methane gas at a time when gas consumption rates are expected to rise dramatically at a compound rate of 11.4 per cent until 2014 to 250PJ per year.
"In less than a year Arrow will be producing gas into a market hungry for more, with a stream of projects ready to supply that market, and you can't get a better economic model than that."