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State Gas Limited (GAS.AX) Reids Dome Production Testing Update

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State Gas Limited
State Gas Limited

State Gas Limited (GAS.AX) Reids Dome Production Testing Update

Brisbane, Australia, April 16, 2021 - (ABN Newswire) - State Gas Limited (ASX:GAS) is pleased to provide an update on production testing activities at its 100%-owned Reid's Dome Gas Project (PL 231) in the Bowen Basin in Central Queensland.

Following significant rain events in March that gave rise to local flooding and made in-field roads temporarily impassable to heavy traffic, the recent dry weather allowed access to Serocold-1 where a work-over of that well was completed on 6th April.

The Serocold-1 work-over cleaned out the section below the previous pump depth and installed a liner which enabled the down-hole pump to be set 330m lower than the previous level. Early indications are positive and suggest that the deeper coals are providing increased water-flow which is generally associated with better permeability.

Work was also carried out on the Nyanda-8 well to reduce the pump size, allowing more efficient pumping as the water production declined and gas production increased.

Dewatering and gas production of the Nyanda area wells has continued following the local flooding and wet weather-related interruptions. Gas flow continues to increase with the rates of 6,000 cubic feet/day recorded at Nyanda-7, and 42,000 cubic feet/day at Nyanda-8.

As demonstrated by cores samples and image logs, natural fracturing has been encountered in the Reid's Dome Project wells, to varying degrees. The high flow rate reported at Nyanda-4 has been attributed to gas contribution from near-well fractures. In line with expectations, the free gas in those fractures appears to have been drained and the gas rate has declined back to a steady 100,000 cubic feet per day. Water production has remained steady through this period. It is expected that new fractures further from the well will open up over time due to shrinkage of the coals as the pressure reduces and gas desorption continues.

Commenting on the results, State Gas Executive Chairman, Richard Cottee, confirmed that the outcomes to date supported his excitement about the favourable geological setting for gas production at Reid's Dome.

"As articulated in my recent presentation at the Australian Minerals & Energy Investment Conference, the natural fractures in these highly gas-saturated coals will help liberate the gas and enhance production. I have been expecting that the coals between the natural fractures will cause a degree of initial compartmentalisation until those coals shrink as the gas is drained. After shrinkage, the various natural fractures should open up, extend and inter-connect over time, providing additional channels for the gas to enter the wellbore for production."

View the video presentation here:

"The results to date at Nyanda-4 appear to support this thesis. I am further encouraged, based on water-make as a proxy for enhanced permeability, by the water pumping rates for all of our wells at the Reid's Dome Project," Mr Cottee said.

"These results are all quite encouraging for long-term development of the Project," he added.

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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