The borehole will be the first to be dug in England as only a few sites are appropriate and the testing has created 12 new jobs.
It is assumed that the drilling will lead to the finding of methane gas, which is set up on natural seams of coal running deep beneath the region.
In terms of CO2 emissions, methane gas is cleaner than coal and oil and can be used in power stations and for domestic gas.
Peter Reilly, spokesman for Composite Energy said: Drilling started about two weeks ago in Luddington, which was chosen as a site for the appraisal borehole for a range of geographical and environmental reasons, but first and foremost because of the amount of coal underground.
Composite Energy has a three-step plan for methane extraction in the region with the GBP80,000 borehole which was drilled as part of the first stage.
