Exponential Increase in Gas Flow at Nyanda-4 - Reids Dome
Brisbane, Sep 16, 2020 AEST (ABN Newswire) - State Gas Limited (
ASX:GAS) advises that gas flow rates at its Nyanda-4 well at the Reid's Dome Gas Project (PL231) have increased exponentially since the Company's last production update on Friday, 11 September. The Nyanda-4 well has been flowing gas at rates exceeding peak production recorded during testing in January this year, with rates overnight above 240mscf (or 240,000 standard cubic feet) per day.
State Gas Executive Chairman, Richard Cottee, said that the leap forward in gas production at Nyanda-4 followed the installation of customised pumping equipment built in Canada to suit the local conditions at Reid's Dome.
"I am really pleased with the performance of the Nyanda-4 well" Mr Cottee said.
"Seeing the well improve gas production and now exceed previous flow rates using the customized pumps is very encouraging for the development of the whole Reid's Dome gas field."
As previously advised, Nyanda-4, drilled by the Company in late 2018, was the first coal seam gas (CSG) well within the Company's 100% owned Reid's Dome Gas Project (PL231). Located in the southern region of the PL231, the well intersected 40m net coal and a further 25m of carbonaceous shales, as well as a number of conventional tight gas sands. With an average gas content of 13.75 m3/t (measured by desorption of the coal cores acquired from the well), the Nyanda-4 results confirmed the potential for a significant CSG project at Reid's Dome.
The Company has since embarked on Phase 1 of an exploration and appraisal programme and confirmed the widespread presence of CSG across PL231. A key element of this programme involved production testing the Nyanda-4 well to confirm the producibility of the gas in the coals. The production test commenced in December 2019 and as previously advised, sustained gas flows from the well commenced after only five days of dewatering. In signs very encouraging for commerciality at the time, the gas rate built to a rate of 227 mscf/d after six weeks with low water make, before technical problems intervened and pumping ceased. The downhole pressure increased and the flow rate fell when dewatering ceased in January.
Following investigation of the pump issues and the installation of customised pumps, the Nyanda-4 production test recommenced in July. After eight weeks of dewatering, gas flow rates have suddenly increased exponentially in recent days, reaching more than 240 mscf/d overnight. Water production continues to be low.
Other milestones during the successful Phase 1 exploration and appraisal program at Reid's Dome have included drilling the Serocold-1 and Aldinga East-1A wells, confirming a significant coal seam gas field across more than 12 kilometres north-south within PL 231, along with production testing of Serocold-1. Gas flows continue to build slowly at Serocold-1 using the new pumping solution, also confirming producibility of the gas.
Previously advised4 damage to the Serocold-1 well bore restricted the depth at which the pump could be placed, resulting in approximately 46% of the targeted coal seams below the pump and unlikely contributors to this test. The increasing flow rates and low water-make at Serocold-1 is encouraging and bodes well for commercial production.
The dramatic production increase at Nyanda-4, and its implications for Serocold-1 and future wells at Reid's Dome, also provide further support for commercial production from PL231 as tightening is expected in the east coast gas market over the coming two-to-three years.
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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