Production Update Reids Dome Project
Brisbane, Aug 12, 2020 AEST (ABN Newswire) - State Gas Limited (
ASX:GAS) refers to its recent announcements1 in relation to its operations at the Reid's Dome Gas Project (PL 231) and provides this update of the production testing of the Nyanda-4 and Serocold-1 coal seam gas wells and volumetric estimation of the Reid's Dome Gas field.
In the south of PL 231, Nyanda-4 is currently flowing gas at rates exceeding 60 mscf/day, less than four weeks after initiating pumping. Water production is again very low, which augurs well for development economics. The Company is preparing for production logging to determine the contribution of the various coal intervals in the well, once the gas flow rates have stabilised at a satisfactory level. This data will inform assessments of the Reserves and Resources in the permit to be undertaken by Netherland Sewell & Associates. It will also assist future well drilling and completions as the field moves to early development.
Located 6.2km north of Nyanda-4 within PL 231, Serocold-1 achieved constant gas flow within one week of being placed on pump, a remarkably early production of gas from the accessible coal seams. This well will be produced to determine the potential from the upper 54% of the coals in this well. The remaining coal seams are situated below the level of the pump due to obstructions in the well. Those remaining 46% of seams below the level of the pump are therefore unlikely to provide any benefit to gas flow rates during the current testing as the water is drawn down to only the level of the pump in Serocold-1. Future well completion will be designed to avoid such issues. As with Nyanda-4, water production is very low providing further positive signs for economics.
State Gas is delighted with the results it is achieving from these exploration wells. Testing the initial exploration wells (rather than drilling new dedicated production test wells) inevitably presents challenges as the wells (one corehole and two narrow RC holes) were not optimised for gas production via casing and conventional production well configuration. This innovative testing provided savings, and has also presented some challenges, requiring the pumps to be redesigned and, in the case of Serocold-1, reset to a much shallower depth than previous attempts (meaning fewer coal seams contributing to production testing). However, use of these initial wells has enabled State Gas to establish gas flow and obtain initial production data much earlier than would have otherwise been possible. The State Gas production team is also very pleased with the performance of the customised pumps now installed and performing as designed in both wells, which will assist with full-field development planning.
As announced on 31 July 2020, Aldinga East 1A (located 12km north of Nyanda-4 within PL 231) has also been flow tested from the intra-Cattle Creek gas reservoir - a conventional gas zone within PL 231. The gas flow rate from the shallow discovery has been calculated at 363 mcf/d. The Cattle Creek Formation contains shallow conventional sandstone reservoirs which will complement the development of the Reid's Dome Beds coal seam gas field.
Commenting on the latest in-field activities, State Gas Executive Chairman, Richard Cottee, said that the acquisition of production testing data at Reid's Dome was being accelerated with a view to early volumetric estimation, which was a priority for the Company. "I am very pleased by these results" said Richard Cottee, Executive Chairman of State Gas', Mr Cottee said.
"Our work investigating the earlier pump issues has paid off, and we have successfully brought the water levels down. The customised pumps solution will also help unlock full-field development of Reid's Dome."
"In the short-term, I am looking forward to ongoing increases in the gas flow rates, and in due course, the production logging test at Nyanda-4 to inform further development," he said.
"We are also now very close to achieving all of the production data required to meet our objective of commissioning a maiden independent Resource estimate for Reid's Dome."
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About State Gas Limited
State Gas Limited (ASX:GAS) (OTCMKTS:STGSF) is a Queensland-based gas exploration and development company with highly prospective gas exploration assets located in the southern Bowen Basin. State Gas Limited's mission is to support east coast energy markets through the efficient identification and development of new high quality gas assets.
It will do this by applying an agile, sustainable but low-cost development approach and opportunistically expanding its portfolio in areas that are well located to gas pipeline infrastructure.
State Gas is 100%-owner of the contiguous Reid's Dome (PL-231) and Rolleston-West (ATP 2062) gas projects, both of which contain CSG and conventional gas. The Projects, together some 1,595km2 , are located south of Rolleston, approximately 50 and 30 kilometres respectively from the Queensland Gas Pipeline and interconnected east coast gas network. State Gas intends to accelerate commercialisation of these assets through the application of an innovative virtual pipeline ("VP") solution which will see the Company transport compressed gas by truck to existing pipeline infrastructure or to an end user.
State Gas also holds a 35% interest in ATP 2068 and ATP 2069 in joint venture with Santos QNT Pty Ltd (65%). These two new areas lie adjacent to or in the near vicinity of State Gas and Santos' existing interests in the region, providing for the potential of an alignment in ownership interests across the region over time and enabling synergies in operations and development.
State Gas is also participating in a carbon capture and sequestration initiative with minerals explorer Rockminsolutions Pty Ltd in respect of EPM 27596 which is located on the western border of ATP 2062. This project is investigating the potential of the unique basalts located in the Buckland Basaltic Sequence (located in EPM 27596) to provide a variety of in-situ and ex-situ carbon capture applications.
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