The Australian-based company V2H International owns the patents over the water-jet technology that has been under development for a number of years.

The V2H – for vertical to horizontal – technology has been applied in both surface and underground applications, as well as in the CSG industry.

More than $40 million has been spent so far developing the technology in Australia and successful trials have been completed by BHP Billiton and Peabody Energy.

The technology replaces traditional drill heads with a high-pressure water system that can rapidly install extensive patterns of lateral radial boreholes into multiple coal seams from a vertical production well.

The speed and steering capabilities mean more gas can be drained from each well and all laterals are steered “in-seam” to maximise drainage efficiency.

The technology can dramatically lower capital and operational expenditure, increase well recoverability and lower environmental impacts.

No fluid or chemicals need to be added for drilling using the V2H system and the system can drill with recycled CSG water.

It also reduces the number of wells needed, with enhanced production due to multiple coal seams being accessible from a single vertical well.

That means surface spacing of wells can be increased with reduced surface infrastructure.

After successful trials and operational crew training in the US in recent weeks, the first V2H system arrived in Sydney in June. It will be deployed by the company’s local subsidiary V2H Australia in coming weeks.

V2H International CEO Darren Rice said the completion of the merger and the success of the testing program in the US would allow the company to start rolling out the technology on a commercial basis.

“The technology has applications across a variety of oil and gas drilling operations, but we see a particular opportunity to compete against, and possibly replace, hydraulic fracturing in the CSG industry because of its low environmental impacts,” he said.

CRCMining chief operating officer Kevin Greenwood said the organisation had a history of commercialising cutting edge technology into the mining industry.

“The establishment of the world’s leading water jet technology company has only been made possible through the support of BHP Billiton and CRCMining’s member companies,” he said.

Rice said the technology had the potential to revolutionise oil and gas markets.

“It’s been a two-year journey since I originally identified the value opportunity in merging the complimentary technologies of the two companies,” he said.

Rice said V2H aimed to use the technology’s environmental and technical benefits to re-energise the Australian oil and gas sector.

“Due to a range of factors there have been no wells drilled in the Australian oil and gas industry this year,” he said.

“Where environmental or commercial issues are the concern, we think we have found the solution.”