Metgasco (ASX:MEL) will soon have a better understanding of its Cooper Eromanga Basin gas acreage with a rig mobilising to drill the first of two wells.
The rig is expected to spud the Vali-2 appraisal well within the next couple of days to appraise the extent of the Patchawarra Formation gas accumulation discovered in Vali-1 ST1 well in Queensland.
Vali-2 will also assess the potential for further gas at a crestal location in the Toolachee Formation that was not tested in the previous well.
Once Vali-2 is drilled, the rig will move on to drill the Odin-1 exploration well in South Australia that targets prospective gross recoverable resources of 12.6 billion cubic feet (Bcf) of gas.
Odin-1 will test the Toolachee and Patchawarra formations, identified by recent 3D seismic, updip of the Strathmount-1 discovery well that was drilled in 1987 but plugged and abandoned as a non-commercial find due to low formation permeability and a poor mud system likely to have caused formation damage.
Strathmount-1 is interpreted to have conventional gas pay in the Toolachee Formation and both conventional and low permeability gas pay in the Patchawarra Formation. The stable gas flow rate of 4.3 mmscf/d achieved in August 2020 on the Vali-1 discovery well following hydraulic stimulation on low permeability Patchawarra gives confidence that a commercial gas flow-rate can be achieved in the Odin-1 prospect by utilising similar production enhancement technology.
These wells and other potential gas prospects such as Kinta in the area may form the basis for a potential production hub at Vali, with operator Vintage Energy (ASX:VEN) planning to have flowline infrastructure feed gas from successful wells into the Vali hub where gas will be transported to market.
Metgasco, Vintage and New Hope Corporation (ASX:NHC) subsidiary Bridgeport (ATP2021 JV) have already received a draft determination from the Australian Competition and Consumer Commission to jointly market gas from the Vali field.
“The pending spud of Vali-2, followed by Odin-1, initiates an exciting period for Metgasco as the appraisal/exploration drilling program is anticipated to boost further gas reserves to underpin the commercial development of the Vali gas field and extend the field life through the potential emergence of a regional production hub to service the ATP2021& PRL211 permits,” chief executive officer Ken Aitken said.
Vali gas discovery overview.
The Vali-1 well was spud (first drilled) in December 2019 and discovered gas in Permian-aged sands.
A subsequent sidetrack was successfully stimulated and flow tested at a stabilised rate of 4.3 million standard cubic feet of gas (MMscf/d) in the third quarter of 2020.
Vali has certified proved and probable (2P) reserves of gross 33.2 petajoules – 8.3PJ () of gas net to Metgasco.
The ATP2021 JV elected to assess the resource upside of the Vali gas field and surrounding area via drilling Vali-2 and Odin-1 to optimise the flowline size and route to handle peak gas rates within the production hub as well as to allow gas marketing advantages.
The Vali-1 well drilled in January 2020, which discovered the Vali gas field allowed Metgasco to remain 25% licence holder and be free carried on Vali-1 drilling by partners Vintage and Bridgeport due to farm-out deals signed in Q2/Q3 CY 2019.
Over at Odin, the company is paying 25 per cent of the costs of drilling the Odin-1 well for a 21.25 per cent interest in the permit which was agreed in a farm-in deal on the PRL211 licence agreed in Q4 CY2019.
This article was developed in collaboration with Metgasco, 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.
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Barry Stroman was a reporter for Zerg Watch, before becoming the lead editor. Barry has previously worked for Wired, MacWorld, PCWorld, and VentureBeat covering countless stories concerning all things related to tech and science. Barry studied at NYU.