State Gas has struck paydirt in its first drilling campaign since listing in October last year.

The company (ASX:GAS) “encountered gas overnight” at a depth of 134 metres in the Cattle Creek formation at Reid’s Dome, a site in Central Queensland.

State Gas made a spectacular debut last year when it returned a stag profit of 75 per cent to its IPO investors on its first day on the ASX, but investors have fled the speculative stock over the last year as they waited for the drilling campaign.

It is made up of assets spun out of West Australia oil company Triangle Energy (ASX:TEG).

The gas explorer is drilling two wells, the first is the Primero West-1 looking for conventional gas at depths up to 250m. The second is the Nyanda-4 which is looking for unconventional gas and coal seam gas down to 1000m.

CEO Lucy Snelling says they plan to drill deeper before sending logging equipment down the well to assess volumes, but they expect to finish it in the next few days.

She anticipates they will start drilling the second well in the next couple of weeks.

Reid Dome is an existing discovery and State Gas’ drilling campaign is to find out the extent of the possible resource in the area.

State Gas opened 3 per cent lower at 30c.

State Gas shares since listing in October 2017.