Reids Dome Production Testing Update
As advised on 27 January 2021, State Gas is undertaking production testing of three coal seam gas (CSG) wells in the Nyanda area at Reid's Dome (refer Figure 1) in order to appraise that area for early development.
Gas production continues strongly at the Nyanda-4 well. Growth in the production rate shows good consistency with prior testing of the well. Current rates are around 100,000 cubic feet a day, which is ahead of previous comparable production tests at Nyanda-4 based on the dewatering timeframe.
Dewatering of the new Nyanda-7 and Nyanda-8 wells continues steadily, to avoid "shocking" the coals and damage to the formation. The water level has now been lowered below the top of the coals in both wells and both exhibit indications of gas flow. Both wells show good recharge, a most promising sign for permeability, and interestingly, the recharge has increased when water levels have dropped below natural fractures in the coals that were identified on image logs. The increases in water flow indicates the natural fractures provide increased permeability, and hence improved potential gas production volumes from the well.
Planning is also underway for drilling at the Company's new Rolleston West permit (ATP 2062), located to the north-west of the Nyanda area at PL 231.
State Gas will continue to update the market as production testing continues and as drilling activities progress.
About State Gas Limited
State Gas Limited (ASX:GAS) is a Queensland-based developer of the Reid's Dome gas field, originally discovered during drilling in 1955, located in the Bowen Basin in Central Queensland. State Gas is 100%-owner of the Reid's Dome Gas Project (PL-231) a CSG and conventional gas play, which is well-located 30 kilometres southwest of Rolleston, approximately 50 kilometres from the Queensland Gas Pipeline and interconnected east coast gas network.
Permian coal measures within the Reid's Dome Beds are extensive across the entire permit but the area had not been explored for coal seam gas prior to State Gas' ownership. In late 2018 State Gas drilled the first coal seam gas well in the region (Nyanda-4) into the Reid's Dome Beds and established the potential for a significant coal seam gas project in PL 231. The extension of the coal measures into the northern and central areas of the permit was confirmed in late 2019 by the Company's drilling of Aldinga East-1A (12 km north) and Serocold-1 (6 km to the north of Nyanda-4).
State Gas is also the 100% holder Authority to Prospect 2062 ("Rolleston-West"), a 1,414 km2 permit (eight times larger than PL 231) that is contiguous with the Reid's Dome Gas Project. Rolleston-West contains highly prospective targets for both coal seam gas (CSG) and known conventional gas within the permit area. It is not restricted by domestic gas reservation requirements.
The contiguous areas (Reid's Dome and Rolleston-West), under sole ownership by State Gas, enable integration of activities and a unified super-gasfield development, providing economies of scale, efficient operations, and optionality in marketing.
State Gas is implementing its strategic plan to bring gas to market from Reid's Dome and Rolleston-West to meet near term forecast shortfalls in the east coast domestic gas market. The strategy involves progressing a phased appraisal program in parallel with permitting for an export pipeline and development facilities to facilitate the fastest possible delivery of gas to market. State Gas' current focus has been to confirm the producibility of the gas through production testing of the wells.
State Gas Limited