Production Testing Update Reid's Dome Project
Brisbane, Jan 27, 2021 AEST (ABN Newswire) - State Gas Limited (
ASX:GAS) is pleased to provide an update on production testing activities underway during the Phase 2 exploration and appraisal program at its 100%-owned Reid's Dome Gas Project (PL 231) in the Bowen Basin in Central Queensland.
As previously advised, a primary objective of the Phase 2 program is to appraise the Nyanda area for early development following the strong performance of the Nyanda-4 Coal Seam Gas (CSG) well, producing gas at rates approaching 500,000 cubic feet per day during testing in late 2020. Accordingly, the Company has drilled two "step out" wells approximately 2.5km to the north (Nyanda-7) and south-west (Nyanda-8) of the Nyanda-4 well, to guide the delineation of an early development area. As announced on 6 January 2021 the new drilling has confirmed the widespread presence of gas-bearing coal seams and significant net coal within the Nyanda area, with all three wells intersecting good quality coals with seams of similar thicknesses and depths and evidence of open fractures.
With these encouraging results the Company is embarking on production testing of the wells, commencing with the Nyanda-4 well being returned to production on 19 January 2021. Gas flows re-commenced immediately at Nyanda-4 with the resumption of dewatering. The well is expected to take some time to recover performance, however rates have been increasing steadily as water levels are slowly lowered. As at 6.00am (AEST) on 27 January the gas flow rate was 57,500 standard cubic feet per day.
Nyanda-7 has now also been completed for production, and testing commenced on 25 January. The well is currently being dewatered to lower wellbore pressure and enable the gas to be produced from the coals.
The Services Rig is currently operating at the most recently drilled well, Nyanda-8, to install the pump to enable dewatering for gas production. All three CSG wells in the Nyanda area are expected to be dewatering by early next week.
The Phase 2 campaign at Reid's Dome also includes proposed wells in the north and central areas of the permit. As advised on 6 January, the drilling of these wells has been held over until the intensity of the current La Nina weather event has passed (the site has received more than 14 inches of rain since 1 December).
Commenting on the results to date Mr Richard Cottee, Executive Chairman said: "I am very pleased with the early recommencement of gas flows at Nyanda-4, particularly as we have only just brought the fluid level in the well below the coal seams. I look forward to providing updates on production at the latest wells, Nyanda-7 and Nyanda-8, in due course."
"The wet weather has been a challenge, but I am very pleased to see these wells being brought on quickly, enabling us to progress towards early development", he said.
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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