Company Update
Brisbane, Dec 3, 2024 AEST (ABN Newswire) - State Gas Limited (
ASX:GAS) (STGSF:OTCMKTS) provides an update on its short-term plan for the Rolleston West drilling program and high density natural gas ("HDNG") operation.
As previously advised, the Company's access to the Rolleston West project area was blocked by the landowner for 18 days, with access being reinstated on 19 November 2024. The landowner's decision to block our access has impacted both the HDNG operation and the drilling program.
Blocked access to the HDNG plant has resulted in the Rougemont 2/3 dual lateral well system requiring a further process of dewatering. Based on the Company's previous experience, gas flow occurs when the well is dewatered to a depth of around 340 metres. State Gas anticipates that managing the draw-down process to ensure underlying coal structures are not damaged will take approximately six to eight weeks.
As a consequence, the Company has agreed with its HDNG customer, to suspend delivery arrangements without penalty, with the intention to recommence in late Q1 calendar 2025. In the interim, State Gas, its partners and customers will undertake optimisation work on the supply chain to support an increase from two to six mine trucks using HDNG, when supply recommences.
Blocked access to drill-pad locations has resulted in the program not being completed prior to the start of the wet season, as originally planned. Unfortunately, the wet season has commenced, and wet weather experienced over the last week has already made access difficult. The Company has assessed the wet season weather forecast and drill rig standby costs and believes it is in the best interest of all stakeholders to defer commencement of the drilling campaign until early calendar 2025 at the first available clear weather window (expected to be in March and April 2025).
The Company's Managing Director, Mr Doug McAlpine said "Deferral of the drilling program and disruption to our HDNG supply arrangements are frustrating by-products of having our land access blocked for an extended period. Despite this we are focused on delivering on our overarching strategy and plan."
About State Gas Limited
State Gas Limited (ASX:GAS) (OTCMKTS:STGSF) is a Queensland-based gas exploration and development company with highly prospective gas exploration assets located in the southern Bowen Basin. State Gas Limited's mission is to support east coast energy markets through the efficient identification and development of new high quality gas assets.
It will do this by applying an agile, sustainable but low-cost development approach and opportunistically expanding its portfolio in areas that are well located to gas pipeline infrastructure.
State Gas is 100%-owner of the contiguous Reid's Dome (PL-231) and Rolleston-West (ATP 2062) gas projects, both of which contain CSG and conventional gas. The Projects, together some 1,595km2 , are located south of Rolleston, approximately 50 and 30 kilometres respectively from the Queensland Gas Pipeline and interconnected east coast gas network. State Gas intends to accelerate commercialisation of these assets through the application of an innovative virtual pipeline ("VP") solution which will see the Company transport compressed gas by truck to existing pipeline infrastructure or to an end user.
State Gas also holds a 35% interest in ATP 2068 and ATP 2069 in joint venture with Santos QNT Pty Ltd (65%). These two new areas lie adjacent to or in the near vicinity of State Gas and Santos' existing interests in the region, providing for the potential of an alignment in ownership interests across the region over time and enabling synergies in operations and development.
State Gas is also participating in a carbon capture and sequestration initiative with minerals explorer Rockminsolutions Pty Ltd in respect of EPM 27596 which is located on the western border of ATP 2062. This project is investigating the potential of the unique basalts located in the Buckland Basaltic Sequence (located in EPM 27596) to provide a variety of in-situ and ex-situ carbon capture applications.
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