Omega celebrates 293m of gas and liquid hydrocarbon shows at Canyon-2 well

Omega Oil & Gas has broken out the bubbly, after intersecting a total of 293m of gas and liquid hydrocarbon shows at the Canyon-2 well during its Permian deep gas exploration in Queensland’s Bowen Basin.

The well is in the highly prospective gas-saturated Kianga Formation – which has an independent prospective resource of 3 trillion cubic feet of gas and 233 million barrels of associated liquids.

The Kianga Formation is the primary target of the current exploration program and was intersected at 3367m. Gas while drilling was recorded over the entire 221m interval of the Kianga Formation.

Encouraging gas shows were also intersected in the upper Back Creek Group, which is a potential additional reservoir, with significant gas peaks being recorded while drilling over an interval of 72m.

Omega Oil & Gas (ASX:OMA) MD Lauren Bennett said the results are an excellent start to the company’s basin centred gas drilling campaign.

“Our pre-drill expectations for this phase were met and exceeded,” she said. “In fact, preliminary analysis of the data would indicate that we have intersected a thicker gas column than initially forecast.

“We hope to confirm this with the results of the open hole logs.”

Canyon-2 an extension of Tasmania-1

OMA spudded the Canyon-2 Permian Deep Gas exploration well in March, the first tangible activity focused on Permian Deep gas in the region since British Gas (BG) executed wells in 2012.

And with the presence of gas bearing sandstones and coals through the Kianga Formation and upper Back Creek, the company can confirm Canyon-2 as a continuation of the Kianga and upper Back Creek Basin-Centred Gas play from BG’s Tasmania-1 gas discovery well – which are plays currently being appraised by Shell.

Canyon-2 is also a continuation of the oil discovery well, Cabawin-1, which was cased, completed and put on production from the upper part of the Kianga Formation in the 1960s.

New gas supply is critical

Omega says its proximity to well established QLD gas infrastructure and the clear requirement for more gas in the major population centres to feed industry, places it in a favourable position to build on this exploration success.

“Given the forecast gas supply shortages, finding and developing new sources of unencumbered gas is critical,” Bennett said.

“Omega’s proximity to well established QLD gas infrastructure and the clear requirement for more gas in the major population centres to feed industry, places Omega in a favourable position to build on this exploration success and the company looks forward to further de-risking a potential 3-TCF of prospective gas resource.”

Well Locations on Top Kianga Depth Structure (metres subsea) (post the drilling of Canyon-2). Pic: Supplied (OMA)

Casing, completing and testing the well

The well will now be suspended for completion before hydraulic stimulation and flow testing during OMA’s next program.

“The strong presence of gas over the sandstones and coals of the Kianga Formation and the upper Back Creek Group is very encouraging, and the success of the well results now means the company will push forward with casing, completing and testing the well,” Bennett said.

It is expected that Canyon-1 will complete drilling towards the end of May, with the company targeting an update to the resource size on the basis of this success in the near future.

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