State Gas to spend up large on development this quarter
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State Gas is planning a big ramp up in spending this quarter, splashing out on well development in its Queensland leases.
The gas explorer (ASX:GAS), which was spun out of oil producer Triangle Energy (ASX:TEG) in October, is planning to spend $861,000 on development this quarter, up from $146,000 in the six months prior.
State Gas owns a single asset: 60 per cent of a lease at Reid’s Dome in Queensland’s gas-rich Bowen Basin.
The permit is a conventional gas project and the two targets have produced gas during past exploration and appraisal.
In December, the company took steps towards starting its drilling program and completed flow testing and analysis on three existing wells.
All wells flowed “significant gas” at rates between 357,000 cubic feet per day (cf/d) and 658,000 cf/d. Later analysis showed it was “pipeline quality”: it didn’t contain many contaminants that must be cleaned out.
State Gas launched onto the ASX with minimal financial data behind it, as parent Triangle only incorporated the business in February 2017.
It raise $5.25 million and on debut jumped 75 per cent to 35c. It closed on Monday at 37c, up 5.7 per cent that day.
Triangle still owns 35.47 per cent of the company.
Triangle managing director Rob Towner, who is also on the State Gas board, told Stockhhead when the business listed that they’d be looking to commercialise the gas as fast as possible to take advantage of the tight East Coast gas market.