Comet Ridge (ASX: COI) is drilling three coal seam gas wells to appraise the extent and characteristics of the coals in a new extension of the Gunn Project Area in Queensland.
The first well, a pre-pilot production well, will be drilled in the company’s wholly owned ATP 744P while two core holes will be acquired in the Lake Galilee Area, which it is acquiring up to 75% from Queensland Energy Resources.
Two of these wells will provide valuable information across the Gunn Project Area while the third and most easterly well will test a different play concept.
All permitting and approvals are progressing to schedule and the first well is expected spud in September this year.
Lake Galilee farm in
Comet Ridge is acquiring up to 75% in the 852 square kilometre Lake Galilee Farm-in Area, which is located in the southeast of QER’s ATP 1015P and between the eastern and western parts of ATP 744P .
Under the three stage farm-in, Comet Ridge will drill two wells by 30 November 2012 to fulfil the Stage 1 commitment, giving it a 20% stake in the area.
Stage 2 will require the drilling of three wells by 30 November 2013 while Stage 3 consists of four additional wells and the development of a pilot by 30 November 2014 to add another 30% and 25% to the company’s interest in the farm-in area.
The farm-in will give Comet Ridge a continuous acreage position across its key areas in the Galilee Basin, allowing the Gunn Project Area to be appraised as a single project.
Comet Ridge has had discussions with several parties to examine the feasibility of developing gas fired electricity generation to supply the significant Galilee Basin coal mine province being proposed along the eastern boundary of Comet Ridge’s ATP 744P.
It is also considering the supply of gas to domestic gas customers via Queensland’s gas network, and/or to the Gladstone LNG projects as longer term commercial options.
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