State Gas Limited Stock Market Press Releases and Company Profile
Quarterly Activities Report
Quarterly Activities Report

Brisbane, July 31, 2019 AEST (ABN Newswire) - Brisbane-based gas developer State Gas Limited (googlechartASX: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:GASState 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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Contact

Greg Baynton
Executive Director
M: +61-414-970-566
E: greg@stategas.com



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