- Preparations well advanced for further drilling and testing program at the Reid's Dome Gas Project (PL 231) planned for 2019.
- Appointment of Mr Richard Cottee as Executive Chairman of the Company.
- $4.9m in funds raised by private placement at $0.70 per share.
- Trial dates set for hearing of State Gas' action to enforce its right under the Joint Operating Agreement to transition to 100% of PL 231.
- Drilling and testing program funded, with end of year cash balance of $6.344m.
State Gas Limited (State Gas or the Company) holds a majority interest in, and is operator of, the Reid's Dome Gas Project (PL 231) in central eastern Queensland, approximately 545 km northwest of Brisbane and 50 km southwest of Rolleston, in the Bowen Basin Central Queensland. The permit hosts both conventional and unconventional gas and is less than 50 km from the high pressure gas pipeline network in Queensland.
In November-December 2018 State Gas, as operator of the Reid's Dome Joint Venture, drilled the Primero West-1 and Nyanda-4 wells. The Primero West-1 appraisal well confirmed expectations, encountering the "Primero" gas sand in the Cattle Creek Formation at 131.5m depth, and identifying a net gas bearing zone of up to 12.5m. Gas flowed at a maximum rate of 0.436 mmscf/d through a 48/64" choke, and laboratory analysis of the composition confirmed it to be 96.7% methane (pipeline quality), a result similar to offset well data.
The Nyanda-4 corehole was the first dedicated coal seam gas well at Reid's Dome. Earlier drilling undertaken in close proximity to the Nyanda-4 site encountered gas shows in association with coal seams. However, that drilling was prior to the establishment of the east coast gas market and related pipeline infrastructure and the coals were not evaluated. Logging and testing activities at Nyanda-4 confirmed a material gas content in the coals, and established the potential for a significant coal seam gas project in PL 231.
The final results of Nyanda-4 confirmed the presence of more than 40 metres of net coal from approximately 394 metres depth to its total depth of 1,200 metres, and a further 25m of carbonaceous shales and thinner coal seams (i.e. <0.3m), indicating 65m of coals and carbonaceous shales (excluding conventional sandstones).
The average gas content from cored samples was 14.6 m3/t. Gas content for the thickest seams was ~16.9 m3/t.
In August 2018 Pipeline Survey Licence 2028 was issued to the Company, enabling investigations to commence for a pipeline route to market.
Following the successful drilling and testing of Primero West-1 and Nyanda-4, the Company is currently planning further drilling and testing operations at PL 231 for 2019 and is progressing a strategy to bring gas to market to meet forecast shortages in the near future. The Company expects to be in a position to make further announcements in this area in the coming weeks. This is part of the Company's determination to de-risk the asset, taking advantage of the buoyant gas market and smoothing the path to earlier commercialisation.
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About State Gas Limited
State Gas Limited (ASX:GAS) is a Queensland-based developer of the Reid's Dome gas field (PL 231), which includes both CSG and conventional gas, originally discovered in 1954 during oil drilling prior to the existence of a pipeline network and an east coast gas market. The Reid's Dome field is located in the Bowen Basin in Central Queensland on the apex of the Springsure-Sericold Anticline. State Gas is sole Operator of PL 231, which is well-located 30 kilometres southwest of Rolleston, approximately 47 kilometres from the Queensland Gas Pipeline.