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State Gas (ASX:GAS) has secured an exploration grant of $5.5 million from the Queensland Government’s Frontier Gas Exploration Program to fund exploration at the company’s
Rolleston West coal seam gas (“CSG”) project with the drilling of two new vertical wells.
Success from this campaign is likely to accelerate State Gas’ application for a petroleum lease over a substantial portion of the project area, which will facilitate ongoing evaluation of the project.
One key aspect of State Gas’ successful grant application is its unique ability to capture gas production testing from new wells – instead of flaring it – thanks to the company’s compression and virtual pipeline assets. This aligns with the grant’s criteria of rapidly delivering new gas supply to Queensland and the East Coast domestic market.
“Qualifying for this exploration grant funding is a strong endorsement for the Rolleston West Project and the Company. It demonstrates that the Queensland Government shares State Gas’ view that the area is highly prospective and capable of supporting new gas project development,” State Gas’ Executive Chairman Mr Richard Cottee said.
Cottee is a legend of the Australian gas industry, whose pioneering work in coal seam gas stimulated the industry into a billion-dollar LNG export market from three Queensland LNG plants at Gladstone.
State Gas has already established 279 petajoules of gas Contingent Resources within the project area.
The company aims to further delineate gas resources, demonstrate commercial viability for a larger-scale gas project, and bring new gas supply to the market. Additional production testing from new wells will contribute to increased utilization of State Gas’ production facilities and support local coal mining operations in reducing emissions through the use of gas.
GAS has been trading at 15.5 cents.
