Omega confirms extensive oil and gas system at Canyon in Taroom Trough

• Logging of Canyon-2 well confirms presence of extensive oil and gas system in Omega’s Taroom Trough acreage
• Result indicates thicker, higher-quality pay interval within target Canyon Sandstone that corresponds with tested zone in Canyon-1H
• Reservoir properties might improve further in eastern part of the Canyon project

Special Report: Omega Oil and Gas has confirmed that an extensive oil and gas system is present across its Taroom Trough acreage in Queensland’s Bowen Basin after completing a cased hole logging program at Canyon-2 well.

High-quality, pulsed neutron logs were acquired in the well, which sits 15.7km from the Canyon-1H horizontal well that flowed significant quantities of oil with gas during testing.

This tool was not run back when Canyon-2 was first evaluated following drilling in 2023.

Omega Oil and Gas (ASX:OMA) noted that open hole logs obtained at the time were subject to difficult hole conditions causing “stick-slip” and subsequently were of sub-optimal quality.

By contrast, the new logs are of very high quality and have confirmed an extensive oil and gas petroleum system within the Canyon project area.

This indicates a thicker and higher-quality pay interval within the Canyon Sandstone interval, which corresponds with the zone that was tested in Canyon-1H, and some additional zones with good reservoir qualities that had not previously been identified.

The logs also allow clear distinction between oil-bearing and gas-bearing intervals, allowing the company to select intervals for the diagnostic fracture injection test, which is essentially a mini fracture stimulation test.

Canyon-2 had penetrated the Canyon Sandstone 167m shallower than at Canyon-1.

Notably, the enhanced reservoir properties observed from log analysis may indicate that reservoir properties are likely to improve further in the eastern part of the Canyon project area where the prospective Permian interval is up to 800m shallower than at Canyon-1.

Cross section of Canyon-1 to Canyon-2. Pic: Omega Oil and Gas

Positive results

Managing director Trevor Brown said the results continued to show extremely positive results from the company’s Canyon project.

“The Canyon-2 cased hole logs have provided confirmation of an extensive oil and gas province with encouraging signs pointing toward commerciality,” he added.

“The Canyon-2 DFIT program will add to our understanding of stacked pay potential and allow important regional correlations – further de-risking the play.”

Ongoing work is focused on the acquisition and evaluation of an extensive suite of high-quality subsurface data to determine the future appraisal drilling program.

It also seeks to convert the existing contingent resource into reserves.

Additionally, the company is looking to engage an appropriate strategic partner(s) to assist with funding the appraisal and development of its Taroom Trough assets while assessing commercial pathways for near-term and long-term development of oil and gas.

OMA has started the DFIT test program at Canyon-2. This will see a series of tests carried out in the coming months in selected zones throughout the prospective Permian interval.

This will gather diagnostic geomechanical data and measure the level of overpressure in multiple zones, which will allow characterisation of overpressure changes with depth and inform zonal correlations across the project area – an important de-risking of the play.

Other activity

Crude oil sourced from Canyon-1H is of excellent quality with an API of 49.5 degrees and negligible impurities, which makes it easier and cheaper to refine than most crudes.

This is expected to receive a premium above the international benchmark Brent crude which has an API of ~38 degrees.

Discussions underway with potential strategic investors are expected to mature in H2 2025.

OMA notes that having 100% ownership of its acreage allows flexibility to review any proposals for investment at the asset or corporate level.

This is aimed at allowing development of the Taroom Trough assets with minimal dilution to shareholders.

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