Quarterly Activities Report
Brisbane, July 31, 2019 AEST (ABN Newswire) - Brisbane-based gas developer State Gas Limited (
ASX:GAS) is pleased to provide its Quarterly Activities Report for the June Quarter 2019.
HIGHLIGHTS:
- Preparations well advanced for further drilling and testing program at the Reid's Dome Gas Project (PL 231) planned for 2019.
- Appointment of Mr Richard Cottee as Executive Chairman of the Company.
- $4.9m in funds raised by private placement at $0.70 per share.
- Trial dates set for hearing of State Gas' action to enforce its right under the Joint Operating Agreement to transition to 100% of PL 231.
- Drilling and testing program funded, with end of year cash balance of $6.344m.
Background
State Gas Limited (State Gas or the Company) holds a majority interest in, and is operator of, the Reid's Dome Gas Project (PL 231) in central eastern Queensland, approximately 545 km northwest of Brisbane and 50 km southwest of Rolleston, in the Bowen Basin Central Queensland. The permit hosts both conventional and unconventional gas and is less than 50 km from the high pressure gas pipeline network in Queensland.
In November-December 2018 State Gas, as operator of the Reid's Dome Joint Venture, drilled the Primero West-1 and Nyanda-4 wells. The Primero West-1 appraisal well confirmed expectations, encountering the "Primero" gas sand in the Cattle Creek Formation at 131.5m depth, and identifying a net gas bearing zone of up to 12.5m. Gas flowed at a maximum rate of 0.436 mmscf/d through a 48/64" choke, and laboratory analysis of the composition confirmed it to be 96.7% methane (pipeline quality), a result similar to offset well data.
The Nyanda-4 corehole was the first dedicated coal seam gas well at Reid's Dome. Earlier drilling undertaken in close proximity to the Nyanda-4 site encountered gas shows in association with coal seams. However, that drilling was prior to the establishment of the east coast gas market and related pipeline infrastructure and the coals were not evaluated. Logging and testing activities at Nyanda-4 confirmed a material gas content in the coals, and established the potential for a significant coal seam gas project in PL 231.
The final results of Nyanda-4 confirmed the presence of more than 40 metres of net coal from approximately 394 metres depth to its total depth of 1,200 metres, and a further 25m of carbonaceous shales and thinner coal seams (i.e. <0.3m), indicating 65m of coals and carbonaceous shales (excluding conventional sandstones).
The average gas content from cored samples was 14.6 m3/t. Gas content for the thickest seams was ~16.9 m3/t.
In August 2018 Pipeline Survey Licence 2028 was issued to the Company, enabling investigations to commence for a pipeline route to market.
PROJECT ACTIVITIES
Following the successful drilling and testing of Primero West-1 and Nyanda-4, the Company is currently planning further drilling and testing operations at PL 231 for 2019 and is progressing a strategy to bring gas to market to meet forecast shortages in the near future. The Company expects to be in a position to make further announcements in this area in the coming weeks. This is part of the Company's determination to de-risk the asset, taking advantage of the buoyant gas market and smoothing the path to earlier commercialisation.
To view the quarterly report, please visit:
http://abnnewswire.net/lnk/6YM4BDBO
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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