The ASX-listing of State Gas represents the first IPO of an east coast gas developer-explorer since 2006.
The State Gas IPO was heavily oversubscribed and closed early, after raising $5.25 million during October at an Offer Price of $0.20. The Company will have a market capitalisation of $26.9 million (at the Offer Price).
State Gas Limited is Operator of and holds a 60% interest in a proven conventional gas field (Reid's Dome) in the Bowen Basin in Central Queensland, discovered in the 1950s. The gas field is secured by a granted petroleum lease (PL 231) located approximately 30 km southwest of Rolleston.
PL 231 hosts a conventional gas project located in the Denison Trough, first discovered in the 1950s. PL 231 is not a coal seam gas target.
State Gas Chairman, Tony Bellas, said that the primary area of focus for State Gas is the shallow, conventional gas target in the Cattle Creek Formation - less than 200m deep, with a major secondary target in the underlying Reid's Dome beds.
"Both targets have produced gas during the drilling of exploration and appraisal wells on PL 231. A number of historical wells have flowed gas from the Cattle Creek Formation, which was reached at depths of as shallow as 130 metres", he said.
"The shallow nature of this conventional target will greatly benefit the economics of the appraisal and development wells that State Gas intends to drill in PL 231 in the period following its admission to ASX.
Mr Bellas said that the underlying Reid's Dome beds are anticipated to be at least 2,770 metres thick and have not been fully tested in the Denison Trough. "They provide an exciting future target for State Gas."
In order to accelerate the options for bringing gas from PL 231 to market, State Gas has recently lodged a pipeline survey licence application with the Queensland Department of Natural Resources and Mines (PSL 2028) with the intention to investigate suitable routes for a feeder pipeline to connected PL 231 with the Queensland Gas Pipeline and the broader east coast gas market.
Mr Bellas said that it was an exciting time to be an investor in the supply side of the Queensland gas market, with the gas industry on the east coast undergoing significant structural change with the growth of demand from the Queensland-based LNG export industry causing a tight supply market.
"The Board has a preference, where possible, for maintaining any gas developed from PL 231 as uncontracted in order to maintain flexibility to take advantage of spot market opportunities," he said.
State Gas has assembled an outstanding board with relevant leadership, project development and petroleum industry experience. In particular, the Company is fortunate to have secured Ian Paton as a technical non-executive director. Mr Paton is a geophysicist and petroleum engineer with substantial oil and gas industry experience. He began his career with BHP in 1976 as a geophysicist and worked in senior exploration and development roles in Santos and Conoco over the next two decades before becoming a consultant. Mr Paton is former Manager of Exploration and Development for Santos.
The State Gas Board also includes Mr Robert Towner, representing 35%-shareholder Triangle Energy (Global) Limited, and energy entrepreneur and substantial shareholder Mr Greg Baynton, as an Executive Director.
About State Gas Limited
State Gas Limited (ASX:GAS) is a developer of a conventional gas field located in the Bowen Basin in Central Queensland. It is Operator and 60%-owner of the Cattle Creek and Reid's Dome Conventional Gas Project located 30 kilometres south west of Rolleston, approximately 50 kilometres from the Queensland Gas Pipeline.
State Gas Limited