Quarterly Activities Report
Brisbane, July 30, 2021 AEST (ABN Newswire) - This Quarter has been a defining period for State Gas (
ASX:GAS) in its march towards commercial production from its 100% owned Reid's Dome Project (PL231) in 2023. The Quarter saw ongoing production testing in the southern Nyanda focus area and the re-establishment of testing at the central Serocold 1 as the Company progresses appraisal of the permit for development.
Highlights
- 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.
To view the full quarterly report, please visit:
https://abnnewswire.net/lnk/03NX66QZ
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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