Record CSG Flow Rates at Reid’s Dome

Source: 3/16/2021, Location: Not categorized

State Gas Limited refers to recent announcements1 relating to its production testing activities at its 100%-owned Reid’s Dome Gas Project (PL 231) in the Bowen Basin in Central Queensland. As previously advised, State Gas is undertaking production testing of three coal seam gas (CSG) wells in the Nyanda area at Reid’s Dome in order to appraise that area for early development.

The Nyanda-4 well has provided exceptional results overnight, producing a total of 620,000 cubic feet in the previous 24 hours.

Drilled in late 2018, the Nyanda-4 well was placed on test for two periods last year; in each case promising gas production was interrupted by pump breakdowns after six and nine weeks respectively. Production in the current test has exceeded previous rates achieved, on both a daily production and instantaneous basis.

Production testing at the Nyanda-7 and Nyanda-8 wells drilled in 2020 also continues.

Nyanda-7 is experiencing strong water recharge, indicating good permeability, although slowing the progress in reducing downhole pressures aimed at accelerating gas production. Despite this, and in a positive early sign, gas production at the well has commenced, with 5000 cubic feet/day recorded.

Nyanda-8 gas flows also continue to build, producing 31,000 cubic feet/day over 24 hours yesterday.

State Gas Executive Chairman, Richard Cottee, expressed his delight: “Last week I advised we had ‘cracked the code’ at Reid’s Dome and these results truly confirm it.”

“The rates we are seeing from Nyanda-4 are well above the indicative threshold for a commercial well (commonly taken to be around 100,000 cf/d), and I am confident the area will prove commercial.” Mr Cottee said.

“In addition, the fact that the well has come back to exceed previous rates so quickly and emphatically is great news – this suggests the well hasn’t been damaged by stoppages in production, as is so often the case with CSG wells. The implication is that Reid’s Dome can supply intermittent volumes, enabling it to optimise sales into a volatile market to achieve best pricing. This is very exciting”, Mr Cottee added.

“I am also pleased with the progress at Nyanda-7 and 8. Neither of these wells has the benefit of the “free gas” that Nyanda-4 has because of its location on the crest of the anticline and this means the pumps have to work harder and longer until the higher flows come through. Nyanda8 is flowing at one third of the indicative commercial threshold of 100,000 cubic feet/day. I have no doubt both these wells will produce at the levels we want to see”, Mr Cottee said.

State Gas also advises that the Secure Well Services Rig 2 was mobilised to site on 15 March 2021 to undertake a workover at the Serocold-1 well. This well will be cleaned out and a new pump installed, prior to a production test commencing to establish the producibility of gas in this central area of PL231.

Planning is also progressing for drilling at the Company’s new Rolleston West permit (ATP 2062), located to the north-east of PL 231, with drilling anticipated to commence in mid to late April, weather permitting.

Further details will be available on Wednesday, 17 March 2020 via a company presentation by Mr Cottee to the Australian Energy & Minerals Conference, to be held in Brisbane. A copy of the presentation will be released to the Australian Securities Exchange on 17 March.

State Gas will also continue to update the market as production testing continues and as drilling activities progress.

This announcement was approved for release by Mr Richard Cottee, Executive Chairman.

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