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- Natural gas and helium producer Renergen (RLT) has posted a drilling update to the market today suggesting it has uncovered gaseous odours at its Virginia Gas Project in South Africa
- The company is in the process of drilling hole P2V2 which is aiming to drill through the base of Karoo sedimentary rock and into the gas-bearing fault structures
- It has drilled through Karoo with drilling to resume once exploration hole MDR1 has been re-entered and deepened
- Previous work at MDR1 determined it to be 200 metres away from a gas bearing structure but upon recent re-entry, a gaseous odour was found
- This was unexpected given no gas was recorded in the original drilling from several years back
- As a result, Renergen decided to log the hole again and enter the point of gas before drilling resumes at P2V2
- Renergen is down 7.26 per cent on the market with shares trading for $1.15 each
Renergen (RLT) has posted a drilling update to the market today suggesting it has uncovered gaseous odours at its Virginia Gas Project in South Africa.
The Virginia Gas Project covers an area of 187,000 hectares of gas fields across Welkom and Theunissen in the country.
On October 21, Renergen posted it is progressing the second hole, P2V2, after the first hole was abandoned in September after losing important drilling equipment.
The aim of hole P2V2 is to drill through the base of Karoo sedimentary rock and into the gas-bearing fault structures.
Renergen has been drilled through Karoo and the well is now being logged before cementing begins.
Drilling will resume at P2V2 once MDR1 has been re-entered and deepened.
MDR1 is an exploration hole which was previously drilled and cased past the Karoo but was ultimately determined to be 200 metres away from a gas bearing structure.
Upon re-entry to MDR1, Renergen encountered a gaseous odour which was unexpected given no gas was recorded in the original drilling from several years ago.
As a result, Renergen decided to log the hole again and enter the point of gas before drilling begins.
This new work is expected to begin in the next three to four days once logging is complete.
“It is always really good receiving the kind of nice surprise like we did this week. Whilst the detection of this gaseous odour should not be misinterpreted as a positive strike, it is an encouraging sign, kind of a good omen before we start drilling,” CEO Stefano Marani said.
“Until we get real flow, we urge caution, these things take time and remain risky,” he added.
Renergen is down 7.26 per cent on the market with shares trading for $1.15 each at 12:54 pm AEDT.
