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Blue Energy announces spudding of Monslatt 3 well as share price increases

Shares in Brisbane-based Blue Energy (ASX: BUL) reacted well to news of the spudding of Monslatt 3 area within ATP814P in the Bowen Basin, Queensland.

Monslatt 3, which spudded on January 6 2010, is the fourth well in the drilling program within the Monslatt area.

During the morning trade, shares in Blue Energy increased 1.5c to 25c.

The previous wells have intersected up to 37m of gas bearing coals and carbonaceous shales and have demonstrated world class gas content of up to 22m3/tonne.

With the identification of gas bearing carbonaceous shales in the Monslatt 1A well drilled in December 2009, which have desorbed up to 10m3/tonne, particular focus will be placed on identifying the extent of these shales in the Monslatt 3 well.

Monslatt 3 is located 1.5km from Monslatt 1A and has been positioned to allow a production pilot well to be located in between the Monslatt 1A and 3 wells.

Planning for the production pilot well is under way with lease preparation having been completed.

In the Galilee Basin, the Kanaka 1 well was completed prior to the Christmas and New Year break.

At present, the rig has been isolated by the recent rain in the area and planning is underway to shift the rig to the next location.

Disclosure: The author holds no positions in the company