Successful Completion of Phase 1 Program at Reids Dome
Brisbane, Aug 18, 2020 AEST (ABN Newswire) - State Gas Limited (
ASX:GAS) has been investigating the potential for a significant coal seam gas (CSG) resource within the Reid's Dome Beds at its 100%-owned PL231 project, since its Nyanda-4 well encountered gas in 38 metres of net coal and 25 metres of carbonaceous shales during drilling in late 2018.
Following the success of Nyanda-4, State Gas embarked on Phase 1 of an exploration and appraisal programme to confirm the widespread presence of CSG across the Reid's Dome Gas Project (PL231). The successful Phase 1 has included a corehole at Aldinga East-1A in the north, a well and production testing in the centre of PL231 (Serocold-1), and production testing of the Nyanda-4 well in the south (see Figure 1*).
The Company is pleased to advise that the objective of the Phase 1 programme has now been accomplished, following confirmation of the presence of CSG across the PL231 permit over at least 12 kilometres, from north to south. Importantly, CSG has been confirmed, and gas has been produced at all three locations.
With this strong validation, necessary data has been obtained to establish the first certified resources for the Reid's Dome gas field. Accordingly, the Company has commissioned Netherland Sewell and Associates Inc. to undertake the certification of Reid's Dome, with the results expected to be available for release by late September 2020.
In the meantime, customised pumps were installed in July and production testing is continuing at both Serocold-1 and Nyanda-4, with gas flows at both wells gradually increasing. Well damage and debris at Serocold-1 has resulted in only 54% of the targeted coal seams being exposed to the test. Despite this limitation, as of last night (after 30 days dewatering) Serocold-1 was producing at a rate of 13 mscf/d. Flow rates have been increasing at approximately 2.5% per day for the last two weeks.
6.2 kilometres south of Serocold-1, Nyanda-4 achieved 227 mscf/d before the pump failed. Following installation of new customised pumps in July, Nyanda-4 is flowing gas again (after 32 days dewatering) at above 70 mscf/d, also increasing at approximately 2.5% per day. The Company intends to cease production testing of Nyanda-4 once it reaches stabilised flows to enable the performance of a Production Log Test ("PLT"). The PLT will enable the Company to determine the relative gas contribution of individual seams in the well, which will help inform the Company on the optimal well design for Phase 2.
12 kilometres north of Nyanda-4, Aldinga East-1A continues to be monitored. As announced on 12 August 2020, Aldinga East-1A has been flow tested from the intra-Cattle Creek conventional gas reservoir, with the gas flow rate calculated at 363 mcf/d. The Cattle Creek Formation contains shallow conventional sandstone reservoirs which will complement the development of the CSG field within the Reid's Dome Beds at PL231.
State Gas Executive Chairman, Richard Cottee, said that the Phase 1 appraisal program had confirmed the presence of significant coal seam gas across more than 12 kilometres within the Reid's Dome Gas Field at PL 231.
"Given the greenfield nature of the field, the results obtained to date have exceeded my expectations," Mr Cottee said.
"Through Phase 1, we have also obtained valuable information for future well completions and optimised the pumping technology for the local conditions," he said.
"The appraisal results augur well for the future and increase my confidence about the scale and timing for the project. This could support pipeline development and see State Gas in production within around two years."
*To view tables and figures, please visit:
https://abnnewswire.net/lnk/E259KV61
About State Gas Limited
State Gas Limited (ASX:GAS) (OTCMKTS:STGSF) is a Queensland-based gas exploration and development company with highly prospective gas exploration assets located in the southern Bowen Basin. State Gas Limited's mission is to support east coast energy markets through the efficient identification and development of new high quality gas assets.
It will do this by applying an agile, sustainable but low-cost development approach and opportunistically expanding its portfolio in areas that are well located to gas pipeline infrastructure.
State Gas is 100%-owner of the contiguous Reid's Dome (PL-231) and Rolleston-West (ATP 2062) gas projects, both of which contain CSG and conventional gas. The Projects, together some 1,595km2 , are located south of Rolleston, approximately 50 and 30 kilometres respectively from the Queensland Gas Pipeline and interconnected east coast gas network. State Gas intends to accelerate commercialisation of these assets through the application of an innovative virtual pipeline ("VP") solution which will see the Company transport compressed gas by truck to existing pipeline infrastructure or to an end user.
State Gas also holds a 35% interest in ATP 2068 and ATP 2069 in joint venture with Santos QNT Pty Ltd (65%). These two new areas lie adjacent to or in the near vicinity of State Gas and Santos' existing interests in the region, providing for the potential of an alignment in ownership interests across the region over time and enabling synergies in operations and development.
State Gas is also participating in a carbon capture and sequestration initiative with minerals explorer Rockminsolutions Pty Ltd in respect of EPM 27596 which is located on the western border of ATP 2062. This project is investigating the potential of the unique basalts located in the Buckland Basaltic Sequence (located in EPM 27596) to provide a variety of in-situ and ex-situ carbon capture applications.
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