Rougemont hits 457,000 scf/day and CNG Project Update
Brisbane, Mar 20, 2023 AEST (ABN Newswire) - State Gas Limited (
ASX:GAS) (STGSF:OTCMKTS) is pleased to report that production testing gas from the Rougemont 2/3 lateral well ("Rougemont") has exceeded 457,000 scf/day. "Daily gas production is unquestionably economic at this rate, which is very encouraging given the top coals are still underwater." said Richard Cottee, Executive Chairman. The Company expects the top coals of the Bandanna coal measures to be uncovered by the end of March, based on its careful approach to drawdown - at a rate of three to four metres of water per day. It is reasonable to expect improved daily gas production once the coal seams are exposed.
In parallel, State Gas continues to evaluate the quickest method by which it can have reserves declared at Rougemont that are sufficient to underwrite the financing of an approximately 20 km pipeline to a connection on the Wallumbilla to Gladstone Pipelines, allowing Rougemont gas to be brought to market.
CNG Project Update
Delivery of the compressor for the Reid's Dome CNG Project has been delayed. The compressor was successfully unloaded at the Port of Brisbane, however as a result of delays in loading the compressor at the point of origin (Port of Houston, Texas), Australian Quarantine and Inspection Services have shipped the compressor offshore for fumigation. We are in the process of understanding when we will regain custody of the compressor, but at this point, we expect the compressor to be landed back in Brisbane by mid-May 2023. Our inability to commission the compressor will have a consequential delay to the original CNG project timetable. At this point, we expect the CNG Project to be producing gas by July 2023.
"While frustrating, given the flow rates being experienced, this should allow State Gas to relocate the CNG Project to Rougemont. This should result in considerable operating cost savings on the Project", Mr Cottee said.
On 17 March 2023, the Queensland Government approved changes to the Company's pre-existing environmental authority for PL 231, that allows State Gas to move forward with construction and commissioning activities for the CNG Project. This is an encouraging demonstration of the Queensland Government's desire to see new gas production brought on-line quickly.
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.
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