Omega has spudded its potentially high-impact Canyon-2 Permian Deep Gas exploration well in Queensland’s Bowen and Surat basins.

Canyon-2 will be drilled to a total depth of 3,600m to prove the prospectivity of the tight, gas-saturated 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 in 2012 has already proved that gas is present in the formation though the gas major, which was acquired by Shell in 2015, with flows ranging from 0.1 to 1 million standard cubic feet per day despite failing to isolate the best gas-bearing sand in the formation.

Omega Oil & Gas (ASX:OMA) will case the well and complete both mudlogging and open-hole wireline logs to better understand and characterise reservoir conditions at depth.

This data is expected to be the key for finalising completion designs and to execute a fracture stimulation program later in the year.

Once this work is completed, the company will mobilise the rig to the Canyon-1 location to drill a well with similar dimensions to Canyon-2.

Significant milestone

“The spudding of the Canyon-2 well is a significant milestone for Omega and is the culmination of months of hard work by the team and our campaign partners,” managing director Lauren Bennett said.

“The successful spud of Canyon-2 and the anticipated positive results we hope to achieve this year come at an important time in the east-coast energy security conversation.

“Projects like Omega’s Canyon play are critical to ensure vital gas resources continue to be discovered to meet strong future demand.

“Gas will play an increasingly important role for energy security for decades, as ageing coal fired power stations are scheduled to close. Additionally, gas will remain a key input for industrial and manufacturing processes.”

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.