Senex Energy (ASX: SXY) has proven that coal seam gas potential in ATP 771P in Queensland’s Surat Basin extends into the adjacent ATP 593P after drilling a successful exploration well.
Four successful drill stem tests were carried out over intervals in both the Juandah and Taroom Coal Measures in the Kato-2 well, one of which flowed gas to surface.
Kato-2 intersected 10.5 metres of net coal in the Juandah and Taroom Coal Measures along with 5.6 metres of net gas bearing carbonaceous shale.
Almost 240 metres of core was collected from the 304.6 metre well, with 28 coal and carbonaceous shale core samples currently being analysed for gas composition, gas saturation and other attributes.
Senex said the coring and permeability data showed that CSG potential in ATP 771P, where almost 200 petajoules of proved, probable and possible reserves have been certified, continued into ATP 593P.
Discoveries in the region have the potential to be feed the coal seam gas to liquefied natural gas projects currently under construction in Gladstone.
While these projects have sufficient gas resources to commit to their construction, further resources would be needed for expansions in either capacity or life.
Domestic gas prices are also trending up towards A$6 to A$9 per gigajoule range from current prices of about A$3 per gigajoule.
Kato-2 follows Kato-1, which spudded on 23 November 2011 and intersected 9.8 metres of net coal in the Juandah and Taroom Coal Measures as well as 7.6 metres of net gas bearing shale, exceeding pre-drill expectations.
Preliminary results from 4 successful drill stem tests also indicated excellent permeability.
Both wells are located in the northwestern region of the Queensland Surat Basin, about 38 kilometres south of Injune.
Senex Energy holds a 45% interest in ATP 593P and ATP 771P and is operator of the joint venture, with the remaining 55% interest held by Bow Energy.