D3 Energy hits harder with near doubling of gas flow rate at RBD03 well

New production equipment nearly doubles gas flow rate at D3 Energy’s RBD03 well
Repurposed gold exploration hole flows 149Mscf/d of gas at a stabilised rate for seven days
New equipment will move to test the company’s RBD10 well

Special Report: D3 Energy has received a major boost after the RBD03 helium and methane well within its ER315 licence flowed gas at a stabilised rate of 149Mscf/d – almost double the previous rate recorded using the previous testing kit.

The excellent result from the multi-well production testing program at the ER315 licence in South Africa’s Free State, was made possible by the recent deployment of more fit for purpose and accurate metering equipment that was designed and manufactured in Australia to meet API and AGA standards.

D3 Energy’s (ASX:D3E) use of this equipment on RBD03 – a repurposed legacy gold exploration hole drilled in 1983 – resulted in the flow of 149,000 standard cubic feet of gas per day (Mscf/d) for a seven day period with total gas produced adding up to just over 1 million scf (MMscf) due to more accurate and reliable measurement.

Given this improvement, it is unsurprising that the company plans to re-test the RBD10 well with the new equipment once testing of RBD03 is completed in about a week’s time.

RBD10 had flowed gas at a stabilised rate of 126Mscf/d during testing and is expected to deliver significant improvements in line with those recorded at RBD03.

The multi-well testing program and pressure-monitoring program will enable critical decisions to be made on well interference and spacing, forming the basis for expediting a Production Right application to be submitted to the South African authorities in the near future.

Sustained material gas production

“Our recent testing at RBD03 has yielded impressive results, with a significant increase in stabilised flow rate compared to previous measurements. The consistency of this flow rate, potentially since its initial drilling in 1983 indicates the unique properties of the reservoir in this area,” managing director David Casey said.

“The significance of the production rate measured in the legacy RBD03 borehole, still producing on trend with RBD01 and the recently drilled RBD10 production well, cannot be overstated, and the current testing programme will be critical to assess the role of depletion, or more importantly potential lack thereof, on gas rates going forward.

“These results further enhance our position as one of very few listed helium companies with both sustained material gas production rates and exceptional helium concentrations.

“The success of the new metering equipment designed by the D3 team is particularly pleasing, and we look forward to the retesting of RBD10 and the upcoming drilling of RBD12, further advancing our exploration and production efforts in South Africa.”

Positioned for the future

D3E, which listed in mid-May this year, holds the ER315, ERA341, TCP235 and TCP240 permits that cover 442,750 acres in Free State.

These permits are prospective for both helium and natural gas (methane) with confirmed free flowing gas from historical gold exploration holes.

Importantly, they are derisked by being adjacent to Renergen’s (ASX:RLT) Virginia gas project, which has the first production right for helium and liquefied natural gas (LNG) in South Africa and has an operational cryogenic helium and LNG plant just 20km to the west.

ER315, in particular, shares many important geological features and conditions with Virginia.

While any natural gas produced at its permits will find ready buyers in energy hungry South Africa, the real prize is the high helium content with concentrations of 5% and 5.1% seen at the company’s RBD10 and RBD11 wells.

Helium is a rare, irreplaceable gas used in semiconductor manufacturing, nuclear energy production, solar panels, optic fibre and the cooling of superconducting magnets in MRI scanning machines.

Its rarity and high demand is also why US spot prices had ranged from US$1000 to US$2500 per thousand cubic feet in 2022.

Upcoming activity

D3E has already executed a rig contract for the drilling of the RBD12 well, which is close to RBD03.

Drilling is expected to begin once test work at RBD03 and RBD10 is completed with the new well expected to not only be an important well in the production testing program but will also confirm the geological model.

This article was developed in collaboration with D3 Energy, 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.