Modelling outlines potential of Omega’s Taroom Trough acreage to deliver oil and gas riches

• Single horizontal well intersecting Canyon Sandstone reservoir could produce 950,000bbl oil equivalent
• Omega’s acreage in the Taroom Trough could support 418 such horizontal wells
• Company to delineate extent of the Canyon Sandstone play and pilot projects

Special Report: Modelling by SLB has provided Omega Oil and Gas with a very clear picture of the massive oil and gas development potential of the Canyon Sandstone reservoir within its Taroom Trough acreage in Queensland.

This work found that 950,000 barrels of oil equivalent or 5.72 billion cubic feet of gas equivalent can be produced over 10 years from a single 2000m horizontal development well that intersects a single Canyon Sandstone reservoir layer.

418 horizontal 2000m horizontal wells at 1000m well spacing could be accommodated within Omega Oil and Gas’ (ASX:OMA) acreage.

Back of the envelope calculations using these figures indicate that a full development of the company’s acreage could recover 397.1 million barrels of oil equivalent or 2.39 trillion cubic feet of gas equivalent.

At the current price of the benchmark Brent crude of US$68.70 per barrel, that could be worth about US$27.28Bn.

Fantastic as they are, these figures are potentially conservative as there is scope for improved reservoir properties and additional reservoir levels containing oil and gas which are not included in the current model.

OMA has already proved that the Canyon Reservoir is capable of producing oil and gas with Diagnostic Fracture Injection Test results confirming that is heavily over pressured and compares very favourably to analogous “liquids rich” US unconventional basins such as the highly productive Eagle Ford, where the average EUR is about 600,000MMbbl of oil.

“SLB’s reservoir modelling outcomes, together with Canyon-2 log and DFIT data, has confirmed the commercial development potential of the Canyon Sandstone reservoir and indicated very large volumes of oil and gas potentially able to be produced from Omega’s Taroom Trough acreage,” CEO and Managing Director Trevor Brown said.

“Proximity to infrastructure means the commercial threshold for development of resources from the Taroom Trough is relatively low.

“Our growing data set shows the highly over-pressured Canyon Sandstone reservoir extends over a wide area, and points to significant upside potential beyond modelled results in both improved reservoir properties across our acreage area, and the likelihood of additional reservoir levels containing both oil and gas.”

Proven potential

In May 2025, a suite of high-resolution cased hole logs acquired in the Canyon-2 vertical well confirmed the presence of five stacked reservoir intervals containing oil and/or gas.

This was followed by a multi-stage DFIT – essentially a miniature fracture stimulation test that’s an essential tool in the characterisation of mechanical rock properties, reservoir pressure, permeability and stress in low-permeability reservoirs – in selected zones throughout the prospective Permian interval in the Canyon-2 well.

Results from this test were highly encouraging with a reservoir pressure gradient of 0.72 psi/ft recorded in the Canyon Sandstone interval, which is very high by industry standards, and only slightly lower than the gradient of 0.79 psi/ft recorded in the Canyon-1H DFIT.

Overpressure is an important consideration for commercial development potential as it helps drive production rates in analogous, unconventional basin-centred gas and oil plays.

Next steps

OMA plans to carry out work to delineate the extent of the play fairway and determine how the play characteristics vary across its acreage position.

This will include the potential for stacked pay in multiple reservoir levels.

The company expects this to enable the location of pilot projects and clarify the pathway to development of oil and gas.

Studies of commercial pathways to market are ongoing and discussions are being held with the Queensland Government and other operators.

OMA is also pursuing the creation of additional value via partnering and potentially selling down selected areas of its wholly-owned acreage.

This will enable it to use capital from larger, carefully selected counterparties to help fund growth.

Other options under consideration to create value include early-stage oil production to deliver near-term cashflow, and growing its acreage through farm-ins, acquisitions or bid round tender.

This article was developed in collaboration with Omega Oil and Gass, 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.