While the intersection of a 293m gas column in the first well of its Permian Deep Gas drill program had Omega feeling rather excited, the second well has it dancing on the streets.

That’s because the Canyon-1 well, which will wrap up this initial program, has intersected an even bigger 424m gas-rich zone in the Kianga Formation and Back Creek Group – the same formations where hydrocarbon shows were observed in the earlier Canyon-2 well as well as the wealth of other historical wells such as Tasmania-1 and Fantome-1 in the region.

And the similarities do not end there.

Significant overpressure was also noted in Canyon-1, which while not a sign of commerciality on its own, is certainly an indicator that Omega Oil & Gas (ASX:OMA) is on to something wonderful.

The results from Canyon-1 and Canyon-2 also confirm the continuation of the Kianga and upper Back Creek Basin-Centred-Gas play from Shell’s Tasmania 1 gas discovery well, a sign that a significant hydrocarbon system is present.

Small wonder then the company has broken out the GOOD pencils and started scribbling away on plans for its hydraulic stimulation campaign on the two wells later this year.

“The results from Canyon 1 are even more exciting than the results from Canyon 2,” managing director Lauren Bennett said.

“Our expectation was a continuation of the same results from Canyon 2. However, drilling has shown an even greater thickness of hydrocarbon-rich zones in the Kianga and upper Back Creek Formations, demonstrating that the gas play at both target formations is extensive.

“Results to date have meant that management will now shift its focus to future hydraulic
stimulation of the deep reservoirs. We expect that these operations will be carried out later this year with extended flow testing continuing into 2024.”

The road to flow testing

Omega has engaged specialist engineers and petrophysicists to analyse all of the data acquired from the two wells as well as the large data sets that QGC acquired at the offset

This data will be used to design the hydraulic stimulation test program with the option for either a vertical or horizontal testing, or both.

With both Canyon-1 and Canyon-2 exceeding its expectations, the company is considering the potential to re-purpose Canyon-1 as a future horizontal well, which will keep well costs low compared to drilling a new horizontal well while accelerating learnings across its extensive acreage.

New financial leader

Meanwhile, Omega has appointed senior finance professional Trent Lockhart as its chief financial officer.

Lockhart has more than 20 years of experience in resources and was most recently the CFO for privately-owned Baralaba Coal Company from 2018 through to 2022.

He was also the financial controller for privately-held Jellinbah Group where he managed the successful transfer of the Jellinbah Group mine from contractor to owner operation structure, achieved critical business goals and was part of the team that grew the company from a 3.5Mtpa operation to 13Mtpa operation.

“Through Trent’s previous roles, he has demonstrated a strong commitment to strategic management, a genuine approach to partnership and extensive transferable experience to commercialising our portfolio of assets and growing our business,” Bennett noted.

This article was developed in collaboration with Omega Oil & 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.