Omega is on track to spud the potentially company-making two well Permian Deep Gas exploration project in southeast Queensland.

The SLB Land Rig 185, which was mobilised from the Northern Territory to Toowoomba, Queensland, during January has undergone and passed third-party inspections, to ensure it meets all necessary safety and operational standards.

It is scheduled to be mobilised to the Canyon-2 well site this week.

Omega Oil and Gas (ASX:OMA) adds that the lease pads for both the Canyon-1 and Canyon-2 wells have been completed.

It has also awarded rig owner SLB with a fully integrated services contract which includes mudlogging, drilling fluids, directional drilling, cementing and wireline logging.

“Having the rig ready for mobilisation to site, the well pads completed and necessary services contracts finalised demonstrates significant progress on Omega’s Permian Deep Gas two well program,” managing director Lauren Bennett said.

“The achievement of these milestones are in line with the program schedule and represent another big step toward the company’s vision to de-risk gas projects of scale that can help arrest the significant forecast gas supply shortfall faced by the Australian East Coast market.”

She added that the company expects the Canyon-2 well to be spudded prior to April this year, on budget and on schedule with its original plan, which will be the first tangible activity focussed on Permian Deep Gas in the Bowen and Surat Basin since British Gas executed its exploration wells in 2012.

Permian Deep Gas play

The twowell program within ATP 2037 and 2038 in Southeast Queensland will test the Permian Deep Gas potential of tight sandstones within the Permian Kianga Formation, which has an independent prospective resource of 3 trillion cubic feet of gas and 233 million barrels of associated liquids.

Previous exploration by BG had proved that gas is present within the tight sandstones, though Omega is hoping to achieve significant higher flow rates by drilling slimmer wells and fracture stimulating the entire gas column rather than trying to isolate the best gas-bearing sand in the Kianga Formation.

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.