Gas flow-rates at 358k scft/day triggers a strategy review
Brisbane, Mar 14, 2023 AEST (ABN Newswire) - State Gas Limited (ASX:GAS) (STGSF:OTCMKTS) is pleased to advise that production testing gas from the Rougemont2/3 lateral well ("Rougemont") is flowing at a rate that is approaching being unquestionably economic.
It is producing in excess of 350,000 scft/day with the flowrate increasing at between 15-20,000 scft/day (see Figure 1* below), despite the top coals of the Bandanna coal measures remaining underwater. If Rougemont gas production continues to increase at this rate it would justify temporarily relocating the relocatable CNG project compression assets from Reid's Dome to Rougemont.
The advantages of such a move would be that the company would produce a positive cashflow from otherwise flared gas whilst preserving the conventional gas at Reid's Dome as a quick response to what should be an increasingly volatile domestic gas market following the closure of the Liddell coal fired power station in April. Whilst such a move may cause a slight delay in the commencement of the CNG project, its gas would still be available for the winter electricity needs following the Liddell closure.
The early success of the Rougemont Production Test means the company is evaluating the quickest method by which it can get reserves declared at Rougemont to underwrite the financing of an approximately 20 km pipeline to a connection on the Wallumbilla to Gladstone Pipelines.
The options for a quick reserve certification range from a three to five well pilot scheme to pressure monitoring wells or a combination of both. A decision on the precise next steps to be undertaken this dry season will be made after discussions with the reserve certifier this month.
*To view tables and figures, please visit:
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.