Botala has spudded the first of four pilot production wells at Project Pitse within the Serowe project. Pic: via Getty Images.
Energy
Botala has successfully spudded the first of four coal seam gas pilot production wells that will determine the commercial flow potential of its Serowe project in Botswana.
The company first farmed into the Serowe coal bed methane project in 2020 and has since moved to 70% ownership.
During this time, it added six (with the seventh now underway) wells to the single well drilled by the previous operator and defined a best estimate (2C) Contingent Resource of 317 billion cubic feet of gas – enough to fuel Botswana’s existing gas power station for about 20 years.
There is also plenty of room for resource growth as the current estimate is based on just five of the seven existing wells, which collectively cover just a small portion of the overall project.
Drilling and labour costs at Serowe area also low with Botala Energy (ASX:BTE) telling Stockhead in July that a well could be drilled and completed for between $200,000 and $220,000 while a comparable well in Australia would cost between $700,000 and $1m.
Offtake is also unlikely to be an issue with gas expected to be sold first to the Botswana Power Corporation before it flows into the grid for potential sale to off takers from Cape Town to the Democratic Republic of the Congo.
Additionally, the company could use the gas for its planned 20-megawatt solar gas hybrid system near Serowe town as well as gas/electricity to potential tenants of its planned 1,520ha Leupane Energy Hub & Industrial Park.
Project Pitse is a program of four wells that will be drilled within an 800m radius of the existing Serowe 3.1 well that is flowing increasing volumes of gas to surface.
Three of the four wells will test gas flows from the Serowe, Upper Morupule and Lower Morupule coal seams, while the fourth will drill through the Serowe coal seam only to determine the contribution of gas from this seam.
The four wells were sited using gravity audio magnetotelluric (AMT) survey work that substantially added to the understanding of the likely extension and potential of CBM in the Pitse region.
The first well — Serowe 3.2 — is currently being drilled and the entire program is expected to take about three months to complete.
Project Pitse seeks to determine the commercial flow-rate potential within surrounds of the Serowe-3.1 well and convert this cluster of five wells into the first commercial production location in that region of the broader Serowe project.
Flow testing of Serowe 3.1 started in November 2022 and as of May this year, the well was reporting an increase in the gas flow rate as de-watering continued.
The well is currently flowing gas, which is being held back by the surface separator to allow the reservoir to build up pressure, which has increased to 30psi.
Botala notes this gas flow is particularly encouraging as the well underwent no stimulation to enhance gas flows other than underreaming of the coal intersection.
“The spudding of Serowe-3.2 is a significant and exciting milestone for Botala,” chief executive officer Kris Martinick noted.
“The results of the Serowe-3.1 flow test are really encouraging and we have observed gas break-out over the past few weeks with gas pressure building up to 30psi.
“We now have the confidence to commence our commercial pilot program and potentially unlock the next phase of gas generation to provide Botswana with access to affordable and reliable energy.”
This article was developed in collaboration with Botala Energy, 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.
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