Sydney, Nov 11, 2008 (ABN Newswire) - Eastern Star Gas (ASX:ESG)(PINK:ESGLF), together with joint venture partner Gastar Exploration Ltd (AMEX:GST)(TSE:YGA), is pleased to announce that results of the Edgeroi-1 corehole have confirmed the northern extension of Bohena Coal Seam development and consequently the overall size and prospectivity of the coal seam gas resource potential of Petroleum Exploration Licence 238 (PEL 238).
Mr David Casey, Managing Director of ESG, advised that "the Edgeroi-1 corehole has confirmed ESG’s prediction that significant coal development exists in the northern portion of PEL 238. The Edgeroi-1 well intersected at total of 23.5 metres of coal, including 10 metres in the primary target Bohena coal, in an area historically considered to be of low prospectivity. This is consistent with results from the Bibblewindi and Dewhurst areas, showing thick, fractured coals with high gas contents". Internal resource estimates suggest that the Edgeroi Field contains an upside potential recoverable gas volume of 634 PJ.
"The results of the Edgeroi-1 corehole are particularly exciting because the corehole was the first of the wildcat oriented exploration coreholes to be completed this year. Edgeroi-1 has successfully demonstrated the coal seam gas potential of the northern portion of PEL 238, more than 50 km to the north of the existing and proposed Bibblewindi production pilots".
"Furthermore, the Edgeroi-1 results auger well for ESG's farmin to PEL 427, located to the north of the Narrabri CSG Project and into which it is anticipated the coals intersected at Edgeroi-1 may extend".
ESG is focussed on exploration, development and production of coal seam gas.
The company's main activity, the Narrabri Coal Seam Gas Project, is located in Petroleum Exploration Licence 238 adjacent to the township of Narrabri in New South Wales. ESG holds a 65.0% interest in the PEL 238 and is the operator. The remaining 35% interest is held by Gastar Exploration Limited (AMEX: GST & TSX: YGA). PEL 238 covers 9,100 kms2 of the Gunnedah Basin, the most lightly explored portion of the Bowen-Gunnedah- Sydney Basin complex which presently supplies the dominant proportion of Australia's coal seam gas production. Production testing is underway at two locations (Bibblewindi and Bohena) and, on the basis of the production pilots, 2P gas reserves of 185 Petajoules and 3P gas reserves of 1,300 Petajoules were independently certified and announced on 24 January 2008.
Further reserves will be generated in 2008/09 in PEL238 through the 20 well corehole programme and the completion of 4 multi-lateral production pilot wells at Bibblewindi, Dewhurst and Coonarah. The in-seam, or horizontal, section of the multi-lateral wells will have a notional length of around 1 km, and will be drilled perpendicular to the fracture system within the target coal seams to maximise connectivity resulting in many times greater flow rates than can be achieved from vertical, fracture-stimulated wells.
Gas from the production pilots will be connected into ESG's Wilga Park Power Station which will, be expanded to take production test gas in addition to gas currently supplied from ESG's Coonarah gas field. MOU's for the supply of gas from PEL 238 have been signed with Macquarie Generation (up to 500 PJ) and Babcock & Brown (up to 40 PJ/a).
Mr David Casey, Managing Director of ESG, advised that "the Edgeroi-1 corehole has confirmed ESG’s prediction that significant coal development exists in the northern portion of PEL 238. The Edgeroi-1 well intersected at total of 23.5 metres of coal, including 10 metres in the primary target Bohena coal, in an area historically considered to be of low prospectivity. This is consistent with results from the Bibblewindi and Dewhurst areas, showing thick, fractured coals with high gas contents". Internal resource estimates suggest that the Edgeroi Field contains an upside potential recoverable gas volume of 634 PJ.
"The results of the Edgeroi-1 corehole are particularly exciting because the corehole was the first of the wildcat oriented exploration coreholes to be completed this year. Edgeroi-1 has successfully demonstrated the coal seam gas potential of the northern portion of PEL 238, more than 50 km to the north of the existing and proposed Bibblewindi production pilots".
"Furthermore, the Edgeroi-1 results auger well for ESG's farmin to PEL 427, located to the north of the Narrabri CSG Project and into which it is anticipated the coals intersected at Edgeroi-1 may extend".
ESG is focussed on exploration, development and production of coal seam gas.
The company's main activity, the Narrabri Coal Seam Gas Project, is located in Petroleum Exploration Licence 238 adjacent to the township of Narrabri in New South Wales. ESG holds a 65.0% interest in the PEL 238 and is the operator. The remaining 35% interest is held by Gastar Exploration Limited (AMEX: GST & TSX: YGA). PEL 238 covers 9,100 kms2 of the Gunnedah Basin, the most lightly explored portion of the Bowen-Gunnedah- Sydney Basin complex which presently supplies the dominant proportion of Australia's coal seam gas production. Production testing is underway at two locations (Bibblewindi and Bohena) and, on the basis of the production pilots, 2P gas reserves of 185 Petajoules and 3P gas reserves of 1,300 Petajoules were independently certified and announced on 24 January 2008.
Further reserves will be generated in 2008/09 in PEL238 through the 20 well corehole programme and the completion of 4 multi-lateral production pilot wells at Bibblewindi, Dewhurst and Coonarah. The in-seam, or horizontal, section of the multi-lateral wells will have a notional length of around 1 km, and will be drilled perpendicular to the fracture system within the target coal seams to maximise connectivity resulting in many times greater flow rates than can be achieved from vertical, fracture-stimulated wells.
Gas from the production pilots will be connected into ESG's Wilga Park Power Station which will, be expanded to take production test gas in addition to gas currently supplied from ESG's Coonarah gas field. MOU's for the supply of gas from PEL 238 have been signed with Macquarie Generation (up to 500 PJ) and Babcock & Brown (up to 40 PJ/a).
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About Eastern Star Gas Limited
Conventional and coalbed methane gas exploration and development opportunities.
About Gastar Exploration Ltd
Gastar Exploration Ltd. is an independent energy company engaged in the exploration, development and production of natural gas and oil in the United States and Australia. The Company’s principal business activities include the identification, acquisition, and exploration and development of natural gas and oil properties. Its emphasis is on prospective deep structures identified through seismic and other analytical techniques, as well as unconventional natural gas reserves, such as coal bed methane (CBM). As of December 31, 2007, the Company was pursuing additional unconventional natural gas exploration in the deep Bossier play in the Hilltop area in East Texas. Its primary CBM properties are in the Powder River Basin in Wyoming and Montana, and in the Gunnedah and Gippsland Basins of Australia
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