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Real Energy Corporation Spuds Cooper Basin Gas Well

Real Energy Corporation (ASX:RLE) has spudded its highly anticipated Tamarama-1 well in the Cooper Basin, Queensland, to confirm the presence of gas in the Toolachee and Patchawarra formations.

The well will also determine reservoir productivity and obtain samples from the Toolebuc Shale to improve its knowledge of this potential shale play.

Any commercial gas discovery will find ready customers given the growing demand in eastern Australia with the liquefied natural gas export projects at Gladstone driving pricing.

Tamarama-1, the company's maiden well in the Cooper Basin, is expected to take about two and a half weeks to drill and complete.

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.

It is surrounded by proven and producing gas and oil fields operated by Santos, with gas production being used to feed growing demand for east coast gas.

It is considered to be very under-explored with no wells drilled within the permit.

The existing seismic grid includes 435 kilometres of multi-vintage 2D regional seismic data.

Real Energy's acreage is prospective for basin centred gas (BCG), conventional oil and shale oil and gas.

This upcoming drilling program will test the presence of BCG within ATP927P.

An Independent Geologist's report has estimated that the Permian section in ATP927P and ATP917P contains a mean gross estimated petroleum initially-in-place of 10.2 trillion cubic feet of gas.

In addition, even if Tamarama-1 disproves the existence of BCG, it will impact on the permits potential to host other forms of hydrocarbons.

Analysis

With drilling of Tamarama-1 now underway, investors will be keeping a close eye on its results.

If successful, Real Energy will drill up to two additional wells that will provide further validation of any available basin-centred gas resource.

Notably, a gas discovery will find a ready market in eastern Australia given that local gas production is being earmarked for the export LNG projects at Gladstone, Queensland.

Share price catalysts include:

- Results from Tamarama-1;
- Decision to drill Queenscliff-1 and West Flynnes-1;
- Results from Queenscliff-1 and West Flynnes-1; and
- Flow testing of wells in 2015.

Shares in Real Energy have risen 62.5% to the current $0.325 since April when Proactive Investors had estimated a share price target of $0.35 to $0.68.

This could be conservative upon successes with its drilling program.

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX "Small and Mid-cap" stocks with distribution in Australia, UK, North America and Hong Kong / China.