Gas plays are building up acreage, kicking off further activity
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With the government focusing on gas as a critical enabler of the Australian economy, the time seems to be right for gas companies to be progressing their respective projects.
Senex Energy (ASX:SXY) has been awarded preferred tenderer status for natural gas acreage in Queensland’s Surat and Bowen basins under the state’s domestic gas acreage tender process.
Importantly, the award includes additional acreage immediately adjacent to its existing Atlas development along with high-potential exploration acreage in the Bowen Basin on trend with the Scotia and Meridian gas fields.
The company believes the additional Atlas acreage will enable rapid expansion of gas production by 50 per cent to about 18 petajoules per year.
Drilling for expansion of production will be funded through free cashflow and existing debt facilities.
The new acreage will also increase proved and probable reserves by 18 per cent to 275 petajoules.
Likewise, Comet Ridge (ASX:COI) has been selected as the preferred tenderer for two gas blocks in the emerging Mahalo gas hub west of Gladstone, Queensland.
The new blocks are immediately east of Mahalo North and also adjoin the Mahalo coal seam gas project.
Comet Ridge believes that along with Mahalo North, the new blocks provide a substantial area for gas development, as an extension of the main Mahalo gas fairway.
Besides their unconventional coal seam gas potential, the two blocks also have conventional gas potential under the coals.
Over in Western Australia, Strike Energy (ASX:STX) and Warrego Energy (ASX:WGO) are preparing to kick off drilling of the West Erregulla-3 appraisal well that follows on last year’s highly successful West Erregulla-2 gas.
West Erregulla-2 had flowed 69 million standard cubic feet of gas from the primary target Kingia Sandstone during testing in October last year, confirming the field is one of the best resources in the onshore Perth Basin.
The new appraisal well will test the continuation of the commercial gas accumulation in the northern fault block.
It will be followed by West Erregulla-4 and the contingent West Erregulla-5 wells that will appraise the reservoir distribution in the central fault block.
All three wells will be flow tested if successful and completed as future producers.