State Gas Limited’s (ASX: GAS) shares were reinstated to the official quotation on 5 December 2018 after the release of an announcement regarding the drilling and logging results of the Nyanda-4 coal seam gas and conventional gas well at the Reid’s Dome Gas Project. After getting reinstated, the share price of the company substantially increased by 71.053 percent on 5 December 2018.
The company has announced the successful completion of drilling, coring, logging and testing of the Nyanda-4 coal seam gas and conventional gas well at the Reid’s Dome Gas Project which is located in Central Queensland. Further, the company has also extended the drilling for a further 200m to a new Total Depth (TD) of 1,200m within the Reid’s Dome Beds.
The results of Nyanda-4 indicates good gas shows from approximately 392m, and an overall increase in gas content with depth, with the data indicating that the well was still in gas shows at TD. As per the Quick-look petrophysics, there is a presence of 38m of net coal, and a further 25m of carbonaceous shales and thinner coal seams in Nyanda-4. To perform the testing, 4 Drill Stem Tests (DSTs) were conducted, the deepest being at 940m and the shallowest at 441m. These tests have established permeability and the presence of approximately 100psi over-pressure within the Reid’s Dome Beds at Nyanda-4. The company also reported that the laboratory work is still in progress which will provide further information on gas desorption and gas composition relating to the coals, along with the reservoir characteristics of the sandstones.
According to the State Gas Limited’s Chairman Mr. Tony Bellas, the outcomes of the Nyanda-4 well have far exceeded the Company’s expectations. Further, the management confirmed that the significant coal seam gas project and a “free gas” presence are within the Reid’s Dome structure in PL 231. He also added that while the company is waiting for further analytical results, the initial findings from Nyanda-4 indicate that this is a great outcome for the shareholders of State Gas, the State of Queensland and the Australian east-coast gas market.
On 5 December 2018, the company also made an announcement stating that it has started the process to increase its Participating Interest in the Reid’s Dome Gas Project (PL 231). As per the announcement, the company is planning to increase its participation interest from 80 percent to 100 percent in accordance with the provisions of the Joint Operating Agreement (JOA) for the PL 231 Reid’s Dome Joint Venture. The company announced that the election to increase State Gas’s Participating Interest is being completed through the provisions of the JOA (clause 14(c)) facilitating the acquisition of a Participant’s Participating Interest where it has reduced to less-than Minimum Interest as defined in the JOA. After the completion and settlement of these arrangements, State Gas Limited will hold 100 percent of the Reid’s Dome Gas Project and PL 231.
In the last six months, the share price of the company increased by 94.87 percent as on 29 November 2018. GAS’s shares traded at $0.650 with a market capitalization of circa $22.02 million as on 5 December 2018 (AEST: 3:38 PM).
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