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State Gas Limited (GAS.AX) Wins Contiguous New Acreage Creating Super Gas Region

·4-min read
State Gas Limited (ASX:GAS)
State Gas Limited (ASX:GAS)

State Gas Limited (GAS.AX) Wins Contiguous New Acreage Creating Super Gas Region

Brisbane, Australia, Sep 23, 2020 - (ABN Newswire) - State Gas Limited (ASX:GAS) has been appointed Preferred Tenderer (on a 100% basis) of substantial new acreage ("PLR 2020-1-5", "Block 5" or "Rolleston-West") in the latest Queensland Government Petroleum Land Release. West of Rolleston in Central Queensland (refer map below*), Block 5 surrounds the northern part of the Company's existing 100% owned PL231, where it is developing the Reid's Dome Gas Project to bring gas to market to meet forecast shortfalls in the east coast domestic gas market.

Being contiguous to PL231, Block 5 covers 1,414 km2, an area eight times larger than PL231 (174 square km). The Rolleston-West project contains highly prospective targets for both coal seam gas (CSG) and known conventional gas within the permit area.

The Bandanna coal measures, a proven resource for CSG in the region, are extensive across Block 5. The Block also contains the extension of the Reid's Dome Beds which the Company is currently appraising in PL231, and several promising conventional targets identified by historical seismic and drilling.

Rolleston-West, like PL231 (Reid's Dome), is not constrained by a domestic market supply condition; gas produced from the Block may be sold to any market, providing further flexibility for State Gas.

Being contiguous with PL231, the addition of Rolleston-West will create a super-gas region and enable the Company to integrate activities and undertake a unified development across both areas. Facilities and infrastructure can be shared and optimally located and economies of scale can be obtained.

Gas from Rolleston-West and Reid's Dome will be exported through a single pipeline, currently being planned by State Gas. The Company has identified two potential routes for an export pipeline (shown below*), one of which passes through Rolleston-West, and has recently obtained Petroleum Survey Licence 2049 which traverses a major part of the new permit and will enable on-the-ground investigations of both routes (refer map*).

State Gas will now proceed to carry out initial works to obtain the environmental and other approvals relevant to the area. Native Title has been extinguished over the vast majority of Rolleston-West, enabling the Company to move quickly to grant of the Authority to Prospect, and subsequently commence works.

State Gas Executive Chairman Richard Cottee said that the award of Block 5 was a 'company-maker' for State Gas. "The new acreage has the potential to quadruple the Company's resource position, and the increase in scale will enable efficiencies and optionality in operations, management and marketing."

Mr Cottee also noted the significance of both conventional and CSG targets within Rolleston-West, and the absence of restrictions on sale of the gas: "The existence of conventional gas, which can be much more easily turned up or down, alongside the CSG, should enable State Gas to better meet the increasingly volatile demand profile of the Eastern Seaboard gas market, as gas is increasingly used to support renewable generation."

Neither PL231 nor Block 5 is subject to domestic marketing conditions. "The gas we produce can be sold to any market. Nothing beats optionality in times of uncertainty", Mr Cottee said.

The Company has already received expressions of interest from potential customers, with two major industrial gas consumers formally supporting the Company's bid for the area.

Mr Cottee commented on the Queensland Government's petroleum land release program and Federal Government initiatives to promote gas to support the national economy. "This latest petroleum land release is well timed to enable State Gas to contribute meaningfully in a gas-led economic recovery."

"The news of the award of Block 5 follows a new record flow rate to the south at Reid's Dome from the Nyanda-4 well during the past weekend, approaching 500 mscf/day after just over eight weeks of de-watering.

"We are very pleased with both the excellent flow rates we are achieving at our 100%-owned Reid's Dome Gas Project, and that this exceptional new gas acreage extending our project area has been awarded to State Gas during the lead-up to such a critical time for the east coast gas market", Mr Cottee said.

*To view tables and figures, please visit:
https://abnnewswire.net/lnk/QO379RMO


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.

http://www.stategas.com

Contact:

Lucy Snelling
Chief Executive Officer
Phone: 0439 608 241
e-mail: lucy@stategas.com

Richard Cottee
Executive Chairman
Phone: 0458 517 850
e-mail: richard@stategas.com

Source:
State Gas Limited

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