- Xstate Resources (XST) and its joint venture partner, Sacgasco (SGC), have struck another 30-metre interval of high gas shows in the Borba 1-7 well
- The latest gas shows from the well, which is in Northern Sacramento Basin in California, come from the Lower Guinda Formation sandstones in the well
- Moreover, the gas shows are the best seen in the well so far, with a gas peak of 385 units — 39 times higher than the background level of 10 units
- Xstate and Sacgasco said drilling struck ethane in the gas stream for the first time, as well, indicating the potential presence of more valuable gas at Borba
- Drilling is continuing below the Lower Guinda Formation and on to the joint venture partners’ next objective at the well
- Shares in Xstate Resources are up more than 7 per cent this morning to 1.5 cents each
- Meanwhile, Sacgasco shares are down a slight 1.1 per cent to trade at 9 cents per share
Xstate Resources (XST) and its joint venture partner, Sacgasco (SGC), have struck another 30-metre interval of high gas shows in the Borba 1-7 well.
The latest gas shows come from the Lower Guinda Formation sandstones in the well, which is in the Northern Sacramento Basin, California.
Importantly, the joint venture (JV) partners said the gas shows are the best seen in the well to date, with a gas peak of 385 units — 39 times higher than the background level of 10 units.
Moreover, while the gas shows were mostly methane, Xstate and Sacgasco said drilling struck ethane for the first time in the gas stream.
The presence of ethane in the gas stream induces potentially higher heating and more valuable gas in the well, which is important given natural gas is priced based on heating content when sold.
Sacgasco Managing Director Gary Jeffery said drilling at the Borba 1-7 well is going to plan.
“The third interval of seismic amplitudes, interpreted to be natural gas reservoirs, has been intersected on target and with the highest gas shows to date, and in a solid interval of sandstone,” Gary said.
He said the well’s sandstone description fits with the company’s revised model of deposition.
“With many more targets to be drilled in this well, it is living up to our predictions and I am increasingly confident that there is much more positive news to come as we drill for older reservoir ‘sweet spots’.”
Xstate Managing Director David McArthur shared similar sentiments.
“This is the third seismic amplitude to exhibit strong gas shows,” David said.
“We are becoming more confident of our geological model with every sand and amplitude,” he said.
Moving forward, the Borba well is currently drilling ahead below the Lower Guinda Formation and on to the JV’s next objective.
Once drilling is complete, Sacgasco will own 66.67 per cent of the Borba well and Xstate will own the remaining 33.33 per cent.
Shares in Xstate are trading 7.14 per cent higher today to 1.5 cents each at 10:48 am AEDT. Meanwhile, Sacgasco shares are down 1.1 per cent to 9 cents each.