Galilee Energy’s Update On Drilling Operations In The Galilee Basin

Galilee Energy Limited (ASX: GLL) is engaged in the energy sector. The group is also in the business of exploring oil and gas. The existing focus of the company is to work for the progress of its strategically located Glenaras Gas Project in western Queensland’s Galilee Basin. The company was listed on ASX in the year 1996 and is headquartered in Australia. The company today, on 8th April 2019, updated about the drilling operations, which is upcoming at its fully-owned and operated Glenaras multi-lateral pilot programme. It is in the Galilee Basin permit ATP 2019. Civil works related to the building of well lease pads and drilling operations are completed, including easy infrastructure access for the programme. Local suppliers who have successfully and safely delivered high-quality work on the previous projects have been awarded with all the civil contracts by the company. At Easternwell Rig 103, the current drilling programme is completed along with another operator and is mobilising to Longreach during this week with drilling to start early next week. An ex-tropical cyclone Trevor has resulted in significant wet weather in the area causing minor delays. The company is targeting the middle of July 2019 to start the new lateral wells to be on production. This will be done after the required completion and tie-in operations. Six weeks is likely the period to complete the pilot drilling programme. The central well from the large drainage area will be provided by shielding from the configuration of the well after the pilot is completely operational. It is likely that three months of production drawdown will be necessary for material gas production rates to be observed. The three-well lateral programme including drilling, completion and tie-in will have an expected cost of $8 million, which is well within the company’s strong current cash position. To facilitate the drilling operations, the current existing wells Glenaras 10L and 12L will be required to be shut, and the recommencing of the full drawdown will occur when the drilling operations are completed. On the financial front, the net cash outflow from the operating activities stood at ~$AUD 1.19 million for the quarter ended March 2019, and it stood at ~$AUD 6.10 million for nine months year till date. The net cash outflow from investing activities stood at ~$AUD 6,000 for the quarter ended March 2019, whereas the outflow for 9 months year till date remained at $AUD 50,000. The cash and cash equivalents stood at approximately $AUD 17.21 million at the end of the period. On the price-performance front, the stock of Galilee Energy Limited traded at A$0.405, with a market capitalisation of A$88.01 million (At market close on 8th April 2019). The stock has generated a negative YTD return of 32.76%, and negative returns of 43.07%, 31.58% and 4.88% over the past six months, three months and one-month period, respectively. Its 52-week high price stands at A$0.800, and 52-week low price stands at A$0.145, with an average trading volume of 347,897.

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