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State Gas Limited (GAS.AX) Spud of First Rougemont well

·5-min read
State Gas Limited
State Gas Limited

State Gas Limited (GAS.AX) Spud of First Rougemont well

Brisbane, Australia, May 17, 2021 - (ABN Newswire) - State Gas Limited (ASX:GAS) has commenced drilling the first well in its new Rolleston-West Gas Project in ATP 2062. Rougemont-1 was spudded at 9:00pm on 14th May 2021. At 6am this morning the well was at 75m.

The Rougemont-1 well is the first of two planned wells being drilled to evaluate the highly prospective Bandanna coals in the eastern arm of the new Rolleston-West permit, which was granted to the Company by the Queensland Government late last year. The Bandanna Formation is well established as a host of commercially viable coal seam gas, producing at the Arcadia Valley (Santos/GLNG) and under development at Mahalo (Comet Ridge/Santos/APLNG) at similar distances to the south-east and north-east of ATP 2062 respectively.

Rougemont-1, with a planned total depth of 800m, is targeting gas-bearing coals between approximately 500m and 780m. Located on the crest of a "plunging nose" in the formation, the coals are expected to host gas content and permeability comparable to the analogue fields.

The Rougemont wells will confirm coal thickness, gas content and the permeability of the coals in this area of ATP 2062. This will be achieved using wireline logs, coal sampling (coring) and specific permeability testing of the coals. The data will provide valuable information as to the potential of the area, to be confirmed through subsequent production testing of the wells. Once the initial testing processes are completed, the wells will be suspended, awaiting subsequent production testing of the wells.

Reid's Dome Gas Project

As previously advised, State Gas is appraising the potential of the Reid's Dome Gas Project (PL231) for development, undertaking production testing of three coal seam gas (CSG) wells in the southern area (Nyanda-4, 7 and 8), and the Serocold-1 well in the central part of the permit.

Production from the Serocold-1 well has been very promising. The well was placed on pump on 7 April, following a workover to clean out and line the well and set the pump some 330m lower than had been possible in the previous test last year. The water level has been lowered to expose just over half of the coals, culminating in production reaching 35,700 cft/day and expected to increase as pumping is optimised. This rate, more than twice the rate achieved in the previous test, indicates the Company has made very substantial progress in "cracking the code" of the coals in this area.

As previously advised the Nyanda-4 well has produced exceptional results, with gas production reaching over 700,000 cft/day as natural fractures were intersected in the well, after which production resumed at the economic rate of around 100,000 cft/day. This production pattern suggests that the free gas in the intersected fractures has been drained. Production at Nyanda-4 has been gradually increasing again, currently at 114,000 cft/day, and we expect that this consistent build-up will confirm the rate at which gas is produced from the natural matrix of the coal.

Production at Nyanda-7 is also slowly increasing, as the rate of water production is reducing.

The higher effective permeability of this well bodes well for future productivity, as natural open fractures provide pathways initially for water and then for gas to be released. Production has built to the current 6,700 cft/day and we expect the productivity of the well to continue to steadily improve.

Gas production at Nyanda-8 is increasing and currently approaching 44,000 cft/day. This well is expected to pass the economic threshold by the end of this financial year.

Combined Development Opportunity in Central Queensland

Executive Chairman Mr Richard Cottee noted that the spud of the Rougemont-1 well was a milestone for the Company. "This is the first well in the new acreage awarded by the Queensland Government to State Gas last year, increasing the Company's potential many-fold.

These core holes are designed to help quantify that increased potential."

"The new Rolleston-West permit covers an area of 1,414km2 adjacent to PL231 in Central Queensland - if all goes well, we have the makings of a major gas development combining the gas from both projects. Knowledge about the potential of Rolleston-West will be vital in informing the development planning for Reid's Dome, enabling the optimum scaling and location of facilities and infrastructure. We will be able to commence at Reid's Dome knowing that Rolleston-West gas will come in, bringing additional cashflow and economies of scale for the benefit of both project areas."

"The synergistic nature of this development coming at the time of a predicted gas shortage, targeted for 2023, will enhance its economics and increase the avenues available for financing such development. In addition, the Company retains significant freedom and optionality for its gas production, as none of its acreage is burdened by any mandated marketing restrictions," Mr Cottee said.

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About State Gas Limited:

State Gas Limited (ASX:GAS) is a Queensland-based developer of the Reid's Dome gas field (PL 231), which includes both CSG and conventional gas, originally discovered in 1954 during oil drilling prior to the existence of a pipeline network and an east coast gas market. The Reid's Dome field is located in the Bowen Basin in Central Queensland on the apex of the Springsure-Sericold Anticline. State Gas is sole Operator of PL 231, which is well-located 30 kilometres southwest of Rolleston, approximately 47 kilometres from the Queensland Gas Pipeline.


Lucy Snelling
Chief Executive Officer
Phone: 0439 608 241

Richard Cottee
Executive Chairman
Phone: 0458 517 850

State Gas Limited

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