Eastern Gas Corporation jumps on strong gas shows at Macalister

• Strong gas shows in Venus 2H as it intersects target coal seam
• Venus-2H continuing to drill toward the planned intersection with Venus-1
• Total gas readings of up to 25.4%
• Gas readings above eight per cent are classified as excellent

Eastern Gas Corporation’s (ASX: EGA) share price has taken off on positive news from drilling of the Venus-2H horizontal appraisal well at project Venus in Queensland’s Surat Basin.

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Venus-2H has entered the target Macalister Lower coal seam and is continuing to drill toward the planned intersection with the existing Venus-1 vertical wellbore.

Since entering the target coal, Venus-2H has encountered intervals comprising up to 100% coal cuttings and multiple excellent gas shows, with total gas readings of up to 25.4%. Under the wellsite classification used for the drilling program, gas readings above eight per cent are classified as excellent.

MD, David Spring, said the gas readings represent hydrocarbons released from coal cuttings during drilling and detected by the rig’s surface gas-monitoring equipment. The results confirm high levels of gas saturation within the target coal along the Venus-2H well trajectory. Once drilling has been completed, the company will test for gas flow rates and provide a measure of future well productivity.

“The drilling results to date confirm that Venus-2H has entered the target Macalister Lower coal seam on its planned trajectory toward Venus-1 and its ultimate 1000 metre horizontal section,” Mr Spring said.

“We have encountered intervals comprising up to 100% coal cuttings together with multiple gas shows classified as excellent under the wellsite rating system, including total gas readings of up to 25.4%. These observations are encouraging and confirm the presence of high gas saturation within the target coal along the well trajectory. However, they are drilling indications rather than flow test results, and the productivity of the well will be determined through the planned dewatering and flow-testing program.

“Our immediate focus is on safely completing the ranging operations and drilling the final section required to achieve the planned intersection with Venus-1, then completion of our planned 1000m horizontal well path.”

Venus-2H is currently at a measured depth of approximately 860m and is estimated to be 60m from Venus-1.

Once the Venus-1 intersection has been achieved, drilling will continue through the target coal to complete the planned 1000 metres horizontal section. The integrated Venus-2H/Venus-1 well system will then be prepared for dewatering and flow testing.

The flow-testing program will assess water production, reservoir pressure response, gas desorption, gas flow and the overall productivity of the target coal.

EGA was up 23.1% to 16.0¢. Mkt cap $22.34M

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