Real Energy Corporation (ASX:RLE) has received some early encouragement with its Queenscliff-1 well in the Queensland Copper-Eromanga Basin intersecting gas in the Toolachee and Nappamerri Formations.
Shares in the company should trade higher on the news.
The well in ATP 927P was drilled to confirm the presence of basin centred gas and determine reservoir productivity.
Queenscliff-1 is currently at a depth of 3,028 metres within the Permian Toolachee Formation target section and is being drilled ahead to a planned total depth of 3,200 metres.
The significance of these and any further gas shows in the Permian Toolachee and Patchawarra formations will be further evaluated by electric logs to be undertaken after reaching total depth.
"While we are still drilling and later running wireline logs for evaluating the significance of the gas seen in the well, Queenscliff-1 results so far appear to be very encouraging," managing director Scott Brown said.
Earlier this month, the company raised $5 million through a private placement to fund its exploration activities.
Queenscliff-1 follows the Tamarama-1 well that intersected 87 metres of strong net gas pay in the target Toolachee and Patchawarra formations.
Drilling Results
Based on the preliminary information from drill cuttings and mud log gas readings, the Toolachee Formation was encountered at around 2,998 metres.
Some gas peaks have been recorded in sandstones of the Paning Member of the Early Triassic Nappamerri Formation and continuous elevated gas readings have been recorded over the Toolachee Formation penetrated so far with several gas peaks.
Notable gas readings range from 50 units over the background gas of 5 units to 308 units over the background gas of 25 units.
Basin-Centred Gas
Basin-centred gas plays consist of gas trapped outside the limits of conventional structural traps, potentially forming an extensive accumulation in the deeper parts of the basin.
The reservoir sandstones holding this gas are typically of lower reservoir quality, referred to as tight gas sands.
While conventional evaluation of tight gas intervals intersected in wells previously drilled in and adjacent to ATP 917P and ATP 927P had resulted in these wells being considered non-commercial, recent advances in the development of tight gas reservoirs have led to commercialisation of these resources.
The Toolachee and Patchawarra formations have been independently estimated to host 10.2 trillion cubic feet of gas.
Highlighting its potential, Beach Energy has attracted supermajor Chevron (NYSE:CVX) to jointly explore and potentially develop both basin-centred and shale gas in the Nappamerri Trough of the Cooper Basin, South Australia.
Santos and its partners in the SACBJV have also gotten into the act with drilling to assess the Toolachee Formation.
ATP 927P
ATP 927P comprises four separate blocks with a total area of approximately 1,718 square kilometres that are located 100 kilometres northwest of Eromanga in southwest Queensland.
While no wells were drilled until Real Energy's Tamarama-1 well, the permit is located close to a number of oil and gas fields and discoveries.
The existing seismic grid includes 435 kilometres of multi-vintage 2D regional seismic data.
The target Toolachee and Patchawarra Formations are present across the entirety of the permit.
This is reflected in elevated gas readings that are reported from wells in the area that were drilled as off-sets on local palaeo-highs, and reported elevated gas readings over the entire interval.
Besides the potential for basin-centred gas, ATP 927P also has shale oil and gas potential in the Toolebuc Shale as well as conventional oil and gas targets.
Analysis
Drilling of the Queenscliff-1 well is yet to be completed, but the gas shows intersected to date provide early encouragement that it can confirm the presence of basin centred gas at Real Energy's permits.
This will follow-up on the 87 metres of strong net gas pay that the earlier Tamarama-1 well intersected in the Toolachee and Patchawarra formations.
There is much to look forward to with drilling continuing and electric logs to be carried out.
Other share price kickers include:
- Decision to drill West Flynnes-1;
- Results from West Flynnes-1; and
- Flow testing of wells in 2015.
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