State Gas Limited (ASX:GAS) is a junior energy producer and explorer with assets concentrated in the Bowen Basin, Queensland. The Rolleston West CNG Project in the Bowen Basin is now in the final stage with mechanical completion and tie-in of the Rougemont-2/3 well anticipated within the next week to be followed by pre-commissioning activities. Importantly, first production and shipments are tantalisingly close and whilst the rate will initially be modest, up to 0.75TJd, the project has intrinsic growth potential (up to 1.7TJd) which could fund modest appraisal and evaluation works, particularly converting contingent gas to bankable reserves. We highlight that the company has invested in weather-proofing the access road and facilities pad providing continuous access and production utility for the project. First gas is always a critical event driver in demonstrating the commercial potential of the assets and providing a cash-flow platform to support growth strategies. Although not noted in the update, we understand the company intends to return to drilling in 2024 to provide additional production capacity to boost RW-CNG output. It is worth noting that whilst industry macro-drivers highlight a continuing gas supply squeeze and rising prices, progress on new developments has been frustratingly slow. In this regard GAS will have stolen a first-mover advantage in the transition from explorer to producer – cash flow is cash flow and initial production can be considered as a quasi-commissioning blueprint for next-phase and scale-up opportunities. The company’s assets are ideally located within a transmission pipeline network with adjacent production analogues translating to relatively low operating and commercial risk. The company holds a material net 2C contingent resource base of more than 500PJ and the strategy to convert resources into reserves and build production at scale is now firmly under way.