With its first Permian deep gas exploration well in Queensland returning better than expected net reservoir and porosity, Omega is now looking to repeat the success with drilling of the Canyon-1 now underway.

Canyon-1 – the second and final well in the company’s current Permian deep gas drilling program – will be drilled to a total depth of 4,062m before it is cased for completion later this year.

It follows on Canyon-2, which had confirmed a 293m gas column along with porosities exceeding more than 9%.

Once drilling is completed, Omega Oil & Gas (ASX:OMA) will determine the production testing program for the second half of the year.

The company will also analyse the date gathered from this program and work with experts to update the prospective resource present in ATP 2037 and 2038.

Current resources are estimated at 3 trillion cubic feet of gas and 233 million barrels of associated liquids.

“The successful spudding of Canyon 1, following the successful drilling and logging of Canyon 2 is yet another milestone in Omega’s efforts to de-risk its Permian Deep Gas resources,” managing director Lauren Bennett said.

“Omega looks forward to providing further updates on the drilling of Canyon 1 and the ongoing analysis of the results from Canyon 2.”

Permian Deep Gas drilling

The company’s Canyon wells represent the first tangible activity focused on Permian Deep gas in the region since British Gas (BG) – now part of Shell – carried out drilling in 2012

This historical drilling has already proven that gas is present in the target Kianga Formation.

However, it failed to isolate the best gas-bearing sand in the formation with the Tasmania-1 discovery well flowing gas at a peak rate of 0.2 million cubic feet per gas after it was fracture stimulated and tested.

Omega aims to address the issues by 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.

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.