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Indus Gas says initial results from Indian Shingli-1 well positive after frac stimulation

Indus Gas Limited (AIM: INDI) said it was encouraged by the results it has so far received from the frac stimulation of the Indian Shingli-1 well, one of the deepest in the region, targeting the tight gas play within the Baisakhi/Bedesir (B&B) formation at the company’s Block RJ-ON/6 in India.

The fracture stimulation was the first stimulation of this formation in this basin with the aim of testing the pressure and flow rate required for the gas to flow freely to the surface, obtaining a free flow of gas at a surface pressure of 12,300 psi (pound per square inch).

The results of the fracturing process will be available after the completion of the currently ongoing final stage and detailed analysis. However, Indus Gas said that progress and indications made to day were encouraging and it intended to pursue tight gas as a key new play within the block through a multi well and multi zone hydro-fracturing campaign in 2010, for which it has already secured fracturing equipment capable of delivering higher pressures and higher flow rates.

“Indus has undertaken a technically challenging frac simulation in one of the deepest wells in the region in order to test the potential of the deeper tight gas play within the block. The hydro-fracturing of the well produced gas to surface in several test sequences. While the well flow back is still under progress, and results would be known after detailed analysis, the company is encouraged by the results so far and will be continuing to pursue tight gas as a vital new play within its block,” said non-executive chairman Marc Holzman.

In other news, drilling on the Eastern Promise well is continuing towards target depth to further assess the potential of tight gas play within the block. The Tirah-1 well was spudded recently as planned to test the Pariwar and B&B formations in the north west of the block. The Sandwich-1 well, targeting the Pariwar and B&B formations in the central portion of the block, is expected to be spudded at the end of the month.

Meanwhile, Indus Gas has ordered all plant equipment required to deliver first gas in Q2 2010 and it will soon be shipped to India.

The first drawdown under the recently agreed US$110 million debt facility to finance the current operations is expected to be made in February 2010.

Disclosure: The author holds no positions in the company