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State Gas Limited (GAS.AX) Exponential Increase in Gas Flow at Nyanda-4 - Reids Dome

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

State Gas Limited (GAS.AX) Exponential Increase in Gas Flow at Nyanda-4 - Reids Dome

Brisbane, Australia, Sep 16, 2020 - (ABN Newswire) - State Gas Limited (ASX:GAS) advises that gas flow rates at its Nyanda-4 well at the Reid's Dome Gas Project (PL231) have increased exponentially since the Company's last production update on Friday, 11 September. The Nyanda-4 well has been flowing gas at rates exceeding peak production recorded during testing in January this year, with rates overnight above 240mscf (or 240,000 standard cubic feet) per day.

State Gas Executive Chairman, Richard Cottee, said that the leap forward in gas production at Nyanda-4 followed the installation of customised pumping equipment built in Canada to suit the local conditions at Reid's Dome.

"I am really pleased with the performance of the Nyanda-4 well" Mr Cottee said.

"Seeing the well improve gas production and now exceed previous flow rates using the customized pumps is very encouraging for the development of the whole Reid's Dome gas field."

As previously advised, Nyanda-4, drilled by the Company in late 2018, was the first coal seam gas (CSG) well within the Company's 100% owned Reid's Dome Gas Project (PL231). Located in the southern region of the PL231, the well intersected 40m net coal and a further 25m of carbonaceous shales, as well as a number of conventional tight gas sands. With an average gas content of 13.75 m3/t (measured by desorption of the coal cores acquired from the well), the Nyanda-4 results confirmed the potential for a significant CSG project at Reid's Dome.

The Company has since embarked on Phase 1 of an exploration and appraisal programme and confirmed the widespread presence of CSG across PL231. A key element of this programme involved production testing the Nyanda-4 well to confirm the producibility of the gas in the coals. The production test commenced in December 2019 and as previously advised, sustained gas flows from the well commenced after only five days of dewatering. In signs very encouraging for commerciality at the time, the gas rate built to a rate of 227 mscf/d after six weeks with low water make, before technical problems intervened and pumping ceased. The downhole pressure increased and the flow rate fell when dewatering ceased in January.

Following investigation of the pump issues and the installation of customised pumps, the Nyanda-4 production test recommenced in July. After eight weeks of dewatering, gas flow rates have suddenly increased exponentially in recent days, reaching more than 240 mscf/d overnight. Water production continues to be low.

Other milestones during the successful Phase 1 exploration and appraisal program at Reid's Dome have included drilling the Serocold-1 and Aldinga East-1A wells, confirming a significant coal seam gas field across more than 12 kilometres north-south within PL 231, along with production testing of Serocold-1. Gas flows continue to build slowly at Serocold-1 using the new pumping solution, also confirming producibility of the gas.

Previously advised4 damage to the Serocold-1 well bore restricted the depth at which the pump could be placed, resulting in approximately 46% of the targeted coal seams below the pump and unlikely contributors to this test. The increasing flow rates and low water-make at Serocold-1 is encouraging and bodes well for commercial production.

The dramatic production increase at Nyanda-4, and its implications for Serocold-1 and future wells at Reid's Dome, also provide further support for commercial production from PL231 as tightening is expected in the east coast gas market over the coming two-to-three years.

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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