COI progresses Mahalo East gas drilling

Comet Ridge intersects greater than expected permeability in lower two coal seams at its Mahalo East-1 vertical well
Drilling now underway at the Mahalo East-2 horizontal well that will target the almost 3m thick Aries coal seam
Different horizontal steering technologies being trialled at Mahalo East-2

Special Report: Comet Ridge’s Mahalo East pilot is looking positive after the initial Mahalo East-1 vertical well intersected 7.2m of net coal with higher than expected permeability in the lower two seams.

Permeability is one of the key factors determining a reservoir’s ability to produce gas, making this result a point in the favour of Mahalo East given there’s already proven production from three other lateral pilots across the broader Mahalo Hub.

This is further supported by Comet Ridge (ASX:COI) noting that gas was observed bubbling from core as the core samples arrived at surface – a result that it was expecting.

A full set of wellbore geophysical logs were also obtained and four short wireline conveyed flowtests were conducted – one across each of the four coal seams intersected.

Mahalo East has 2C contingent resources of 31 petajoules (PJ) of gas and is about 25km east of the company’s Mahalo North pilot, which has proved and probable (2P) reserves of 43 PJ.

“It is pleasing that another vertical well at the Mahalo Gas Hub has further confirmed our geologic model, supporting our confidence in the development of the high-quality fairway,” managing director Tor McCaul said.

“We were able to measure higher than expected permeability values in the bottom two coals in the Mahalo East-1 vertical well, which confirms our confidence about a very large gas-in-place to be developed in this area.

“We see the entire Mahalo Gas Hub as a key contributor to the East Coast gas story, with the widely publicised supply shortfall approaching rapidly and very few new fields available to contribute meaningful gas volume.”

Mahalo East drilling

The Mahalo East-1 vertical well was drilled to a total depth of 362m to obtain confirmatory coal reservoir data in the northeast section of the high-quality fairway and serve as a vertical production well for the Mahalo East 2 lateral.

COI cut 79.3m of core from above the top coal right through the coal reservoir section and has now spudded the Mahalo East 2 lateral well about 370m to the southeast.

Mahalo East-2 will be turned at an angle towards Mahalo East-1 with the goal of drilling horizontally through the almost 3m thick Aries seam.

It will intersect Mahalo East-1 before continuing on its path to the north-west.

The company noted that it is trialling different steering technology in this well and will determine the total length of the lateral well from operational considerations as the drilling progresses.

Drilling costs are supported by the Queensland Government’s Frontier Gas Exploration Grants Program, which awarded COI a $5m funding allocation.

This article was developed in collaboration with Comet Ridge, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.