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- Renergen (RLT) has been forced to abandon an inclined well, targeting gas-bearing fracture systems in the Virginia Gas Project production hub
- The emerging natural gas and helium producer sells compressed natural gas (CNG) from the hub in South Africa but will switch to liquified natural gas (LNG) production next year
- When drilling the well, the base assembly was lost before breaking through the base of the Karoo sedimentary rock and Renergen decided to abandon the well
- The company has revised the drilling program, secured a directional drilling rig and gained access to an already-drilled exploration well near the potential fault system
- Shares have been trading flat at $1.12 at 1:00 pm
Renergen (ASX:RLT) has been forced to abandon an inclined well targeting gas-bearing fracture systems in the Virginia Gas Project.
The Virginia Gas Project covers 187,000 hectares of gas fields across Welkom, Virginia and Theunissen, in the Free State of South Africa.
The emerging natural gas and helium producer sells compressed natural gas (CNG) from the hub, but following a plant expansion to be completed in 2021, Renergen will instead produce liquified natural gas (LNG).
When drilling the inclined well, the base assembly was lost before breaking through the base of the Karoo sedimentary rock and the company decided it best to abandon the well.
As such, Renergen has revised the drilling program and has also secured a directional drilling rig.
Further, the company has gained access to an exploration well from several years ago, cased to the base of the Karoo sedimentary rock, near the potential fault system.
CEO Stefano Marani is keeping a positive view of the setback and the company is expecting to be able to make up for the lost time.
“It is unfortunate that the drilling rod broke, but unfortunately accidents happen beyond anyone’s control. The silver lining is that it resulted in us gaining access to a fit-for-purpose directional drilling rig, which means we will be able to drill with far greater confidence and speed.”
“Where we were drilling one before, now we have multiple targets being drilled concurrently, and in some highly prospective areas where indications of gas are strong, and no exploration drilling has been undertaken to date,” he explained.
Shares have been trading flat at $1.12 at 1:00 pm AEST.
