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State Gas provides Central Queensland production testing update

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World Coal,

State Gas Ltd has provided an update on its current production testing activities underway within its Central Queensland gas projects.

The company is conducting concurrent programmes of work: at its Reid’s Dome Project at PL 231 (Reid’s Dome Beds coals), to confirm the commerciality of the project for delivery of new gas supplies into the east coast market; and at its contiguous Rolleston-West Project (Bandanna Formation coals) on the recently issued ATP 2062 to confirm the area for gas development. Gas production testing is currently underway at both of these projects.

Two wells, Rougemont-1 and Rougemont-2, were drilled into the eastern arm of ATP 2062 in mid 2021 as the first wells in the new permit. The wells targeted the Bandanna Formation, a coal formation producing commercially at Arcadia Valley (Santos operated) to the south east, and under development (by Comet Ridge) at Mahalo to the north. Both wells encountered approximately 8 m net coal, with good quantities of gas at or near pipeline quality. The permeability at Rougemont-2 was an exceptional 395 mD, and the company commenced a production test of the well on 15 November 2021.

Production testing at Rolleston-West has included ongoing pumping to slowly reduce water levels at Rougemont-2, to minimise the potential for sudden pressure changes to damage to the reservoir. While the water level is currently ~130 m above the coals with several further weeks required to expose them, gas production has already commenced at Rougemont-2. Gas flows are steady with consistent growth, and are expected to increase significantly once the coals are fully exposed. Sampling conducted in 2021 indicated gas of pipeline quality at Rougement-2.

At Reid’s Dome, State Gas undertook a highly successful production test of the Nyanda-4 well in the first part of 2021. Encouraged by this success and the high gas contents in the area, the company undertook production enhancement activities at the Nyanda-8 and Serocold-1 wells to establish the potential of these wells to deliver results similar to the Nyanda-4 well. The Nyanda-8 well was jetted and the test recommenced on 28 November 20215 , and the Serocold-1 well was sleeved and the test recommenced on 5 December 2021.

Skin damage to the formation at Nyanda-8 appears to be slowly resolving, enabling ever increasing gas volumes to be produced from the well. Despite the formation damage, Nyanda-8 is consistently producing gas at relatively low volumes, with small but steady increases daily.

The Serocold-1 production test started well, producing consistent and growing volumes. Production has temporarily ceased at Serocold-1 as a result of a failure of the pump (due to parted rods). The company is currently co-ordinating the repair of the pump, with testing expected to recommence in early February.

State Gas Executive Chairman, Richard Cottee, expressed his satisfaction with the progress of the Rougemont-2 and Nyanda-8 production tests: “I am very pleased to see the consistent production from the wells. While volumes are initially small, I am expecting we’ll see significant increases in gas flows in the coming weeks.”

“The Rolleston-West Gas Project includes a significant area of Bandanna Coals in Central Queensland, and we remain excited about its potential in the east coast gas market.”

“I am also keen to see how Sercold-1 performs once that well is back on pump and the water lowered,” he continued. “Signs were promising prior to the breakdown, so I am expecting good results to come there as well.”

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Queensland coal news