Quarterly Activities Report
- Nyanda 4 well produces gas at close to 700,000 cft/day before stabilising at 140,000 cft.day
- Production Log Test at Nyanda 4 confirms production of gas from 1150 metres depth, increasing potential Project reserves
- Infrastructure providers willing to build, own and operate pipeline and facilities, reducing the capital requirements of State Gas
- First drilling at the Company's 100% Rolleston-West Project (ATP 2062) confirms a viable coal seam gas play
- Rougemont 1 and Rougemont 2 wells intersect 8 metres net coal, with seams up to 2.8 metres thick and laterally continuous over many kilometres
- Exceptional permeability at Rougemont 2 bodes well for gas production.
Production testing at Nyanda 4 saw gas flows from the well surge towards 700,000 cubic feet/day before settling back to a rate around 140,000 cubic feet/day with an ongoing steady increase. These results have been very encouraging and have confirmed the simple and cost-effective completion technique employed for this well.
Data obtained from the production test at Nyanda 4 has indicated that gas is being produced from zones much deeper in the well than is traditional for coal seam gas, and during the Quarter the Company undertook a Production Log Test ("PLT") of the well to confirm this. The results of the PLT have clearly confirmed three prime production zones, of which the most productive are the top zone, at depths between 400 and 600 metres, and in addition, the lower zone at around 1000 to 1200 metres.
The confirmation of gas production at these lower depths will be critically important as it not only confirms more productive zones in the Reid's Dome Beds, but also increases the area from which production can be expected, both of which should translate to greater reserves.
Production testing also continued during the Quarter at the Nyanda 7 & 8 wells (approximately 2.5km to the north and south west of Nyanda 4 respectively). Gas production from these wells was constrained by what we believe is higher "skin" at the interface between the coal and the wellbore and lower permeabilities, but nonetheless amounted to 40,000 to 50,000 cubic feet per day at Nyanda 8. Your Company believes that substantially higher rates can be achieved from this well with jetting of the higher productive zones, thereby exposing more of the productive coals. We hope to confirm this enhanced completion technique this Quarter.
The highest productive zones in Nyanda 8 will be identified by a PLT, which is expected to confirm production at depth is also a feature in this well. A PLT at each of Nyanda 4 and Nyanda 8 will provide invaluable information towards our understanding of the Reid's Dome coals, however should not be further required as a standard practice.
Serocold 1, returned to gas production, surged over 60,000 cubic feet/day, stabilising at approximately 36,000 cubic feet/day and increasing, before solids in the wellbore caused the pumps to seize. This influx of solids can be prevented by foam squeezing or sleeving (both of which are standard techniques) with little material incremental cost. The Company plans to implement a foam squeeze in this well during the current Quarter to confirm this central area of the permit as commercially productive.
With good results from these works we anticipate obtaining a reserves certification next Quarter.
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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, originally discovered during drilling in 1955, located in the Bowen Basin in Central Queensland. State Gas is 100%-owner of the Reid's Dome Gas Project (PL-231) a CSG and conventional gas play, which is well-located 30 kilometres southwest of Rolleston, approximately 50 kilometres from the Queensland Gas Pipeline and interconnected east coast gas network.
Permian coal measures within the Reid's Dome Beds are extensive across the entire permit but the area had not been explored for coal seam gas prior to State Gas' ownership. In late 2018 State Gas drilled the first coal seam gas well in the region (Nyanda-4) into the Reid's Dome Beds and established the potential for a significant coal seam gas project in PL 231. The extension of the coal measures into the northern and central areas of the permit was confirmed in late 2019 by the Company's drilling of Aldinga East-1A (12 km north) and Serocold-1 (6 km to the north of Nyanda-4).
State Gas is also the 100% holder Authority to Prospect 2062 ("Rolleston-West"), a 1,414 km2 permit (eight times larger than PL 231) that is contiguous with the Reid's Dome Gas Project. Rolleston-West contains highly prospective targets for both coal seam gas (CSG) and known conventional gas within the permit area. It is not restricted by domestic gas reservation requirements.
The contiguous areas (Reid's Dome and Rolleston-West), under sole ownership by State Gas, enable integration of activities and a unified super-gasfield development, providing economies of scale, efficient operations, and optionality in marketing.
State Gas is implementing its strategic plan to bring gas to market from Reid's Dome and Rolleston-West to meet near term forecast shortfalls in the east coast domestic gas market. The strategy involves progressing a phased appraisal program in parallel with permitting for an export pipeline and development facilities to facilitate the fastest possible delivery of gas to market. State Gas' current focus has been to confirm the producibility of the gas through production testing of the wells.
State Gas Limited