Omega is just days away from drilling the Canyon-2 well, the first of two wells that will test the potentially company-making Permian Deep Gas play in Queensland’s Bowen and Surat basins.

It follows the completion of mobilisation and pre-spud checks of the SLB (formerly Schlumberger) Land Rig 185 to the Canyon-2 site.

The two well 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.

Any success from Omega Oil & Gas’ (ASX:OMA) drilling will come at a time when the Australian Energy Market Operator (AEMO) has identified continued risks of near-term shortfalls and a longer-term supply gap due to declining gas production in the southern states.

“The successful mobilisation of the SLB rig to our first drilling location is an exciting milestone and the team is busily working towards ensuring a safe and successful start to our Permian Deep Gas drilling campaign in the coming days,” managing director Lauren Bennett said.

Should drilling of the wells prove successful, the company will then finalise its plans to complete them, which will involve a fracture stimulation program that builds and improves on BG’s pilot program in 2012.

Improving on historical work

BG’s pilot program had apparently failed to isolate the best gas-bearing sand in the Kianga Formation though it still succeeded in achieving gas flow rates ranging from 0.1 to 1 million standard cubic feet per day.

Omega’s plan to achieve success includes drilling slimmer wells to improve efficiency and fracturing the entire gas-bearing column – volcanics, clays, clastics and all – rather than trying to isolate or pinpoint the best target.

Success using this method will de-risk further appraisal and set the stage for the company to improve future results using other methods such as 3D seismic to determine whether deviation or horizontal drilling could be considered.

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.