Pure Hydrogen has received some good news after its Venus-1 pilot coal seam gas well recorded early gas breakout after producing just 50 barrels of water.

The estimated breakout gas rate of 84,000 cubic feet per day confirms the interpreted high gas saturations of the target Walloon coals and is expected to continue increasing as the controlled pressure drawdown continues.

And that’s not all that’s positive for Pure Hydrogen (ASX:PH2).

CSG wells typically require a period of de-watering to reduce pressure before gas production in any significant quantities begins.

For a well to start gas production so quickly after just a small amount of water is produced could point to the need for shorter de-watering periods, which could in turn reduce costs.

The company has already noted that the results of flow test to date and current gas pressure build-up suggests a successful, more robust enhancement at Venus-1 could substantially decrease the time to achieve commercial gas flows.

“Pure Hydrogen is encouraged by the initial gas breakout after only 50 barrels of water production at Venus-1,” managing director Scott Brown commented.

“It is a positive step towards proving commercial gas flows and the certification of material gas reserves at Project Venus located near the town of Miles in Queensland.”

Project Venus

Project Venus is located in central Queensland and has a best estimate contingent resources (2C) of 130 petajoules (PJ) of gas.

Should Pure Hydrogen be able to prove commercial gas flows at Venus-1, the company could convert the 2C resources into proved and probable (2P) reserves, which have a high likelihood of commercial extraction.

Certifying 130PJ of gas reserves is enough to underpin a sizeable gas sales contract to justify development of Project Venus and its connection to nearby gas pipeline infrastructure.

The same gas could also be used to fuel the company’s proposed CSG to hydrogen production facility and hub.

This article was developed in collaboration with Pure Hydrogen, 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.