Quarterly Activities Report
State Gas has been conducting production testing at each of the Projects during the Quarter. This testing has provided the data necessary to determine the optimum design for development wells in each of the two projects.
At Rolleston-West, analysis of pressure data reveals that careful draw-down of water levels in the Rougemont-2 well has preserved the favourable reservoir characteristics. This data has now been compared with analogue vertical pilot production test wells. Importantly, the analogue data indicates that highly commercial gas flows can be expected from horizontal development wells: analogue horizontal wells have achieved 400,000 to 1,400,000 standard cubic feet of gas per day on long term production test.
Planning has accordingly commenced for State Gas to drill a demonstration horizontal development well at Rougemont. It is anticipated that the well will be drilled in August or September and immediately placed on production test.
Production testing at Reid's Dome has provided a variety of outcomes. The tests demonstrate the potential of the Nyanda-4 area as well as less productive areas of the field, and again, has provided the information to determine the preferred design of wells to be utilised in the development of the field. Next steps for the Reid's Dome Gas Project are currently being planned.
At the end of the Quarter the Company had cash at bank of $3.98m, after expending $1.88m in Project development costs and $0.20m in other costs.
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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