An oil and gas exploration company, Strata-X Energy Limited (ASX: SXA) on 14 May 2019 announced that based on the integration of regional data and data acquired from the latest 19B-1 well of the company, the MHA Petroleum Consultants have upgraded the gas resources within Serowe CSG Project.
At present, the entire Prospective Resource, accredited net to SXA is standing at 6.08Tcf. This means that there was a growth of 83% from the earlier resource certification.
The area near the logged 19B-1 well and where the SXA’s drilling work had been carried out in the recent time, contained 2C Contingent Resources of 23Bcf of natural gas. The drilling work at the 19B-1 well came across eighteen metres of net coal, along with twelve metres of multi-seam bright coals with ~ 100% gas saturation. During the drilling phase of the target coals, it was found that the natural gas was breaking out and was bubbling to the surface.
The focus of the company on the high-grade area would drive its major growth. Within the high-grade area, A four-well appraisal drilling work, as well as production testing programme is being planned and tendered. The four-well drilling work will consist of the well’s production testing for obtaining fluid flow rate details. This detail will be used for creating a multi-well CSG production pilot programme for the demonstration of rates of commercial gas flow.
For the planned CSG production pilot programme, SXA is strategizing to apply proprietary completion, as well as production methods to be created for the purpose of yielding commercial gas flow rates. Wellpro Services is a private service company based in Queensland area. It has skills in completion of CSG well, along with the knowledge in production methods. Wellpro also has proprietary methods, as well as the equipment which is designed in such a manner that it will minimize the time to commercial gas flow rates. Strata-X Energy intends to utilize the equipment in the pilot.
On 25 March 2019, the wholly owned Strata-X’s 19B-1 well had finalized the field operations. The company on the same day mentioned that the detailed interpretation of the well would release soon.
On 1 April 2019, SXA declared that the explanation of the conventional and BMR wireline log data signified the gap ranging between 404- 464 mt. Also, there were around 18 metres of net coal. Further, the company highlighted that all the seams appeared to be gassy with numerous coals encompassing a high level of gas saturation, which was up to 100 percent. Besides, the gas content that was recorded was up to 5.81 m3 per tonne.
In the March 2019 quarter, there was a net cash outflow of US$0.247 million through the operating activities of the company. There was a net cash inflow of US$0.292 million through the financing activities. By the end of March 2019, Strata-X Energy had net cash and cash equivalent of US$0.431 million.
The shares of Strata-X Energy have generated a negative YTD return of 8.33%. The shares of SXA was trading at A$0.059 (as on 15 May 2019, 3:23 PM AEST), up by 7.273%. Strata-X Energy holds a market capitalization of A$4.92 million and approximately 89.54 million outstanding shares.
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