Tamboran Resources Ltd (ASX:TBN) is trading higher after Tanumbirini 2H and 3H wells flowed gas to surface following a successful fracture stimulation program in the EP 161 joint venture licence of the prolific Beetaloo Sub-Basin in the Northern Territory.
The natural gas company is now working on de-watering and clean-up activities at the two wells, while information on flow test results will be announced once stabilised flow conditions have been established.
Gas flow follows successful fracture stimulations across the 11 and 10 stages in the T2H and T3H wells, respectively.
Looking ahead, production data is expected to be announced after a 30-day flow test, in-line with unconventional reporting best practice.
Further updates on the steady-state production are planned at regular intervals.
Shares have been up as much as 8.2% this morning to A$0.40, nearing the record high of A$0.42 set in late November.
Milestone for Tamboran and partner Santos
Speaking to the progress to date, Tamboran managing director and CEO Joel Riddle said: “Tamboran announces that the Tanumbirini 2H and 3H horizontal wells were successfully fracture stimulated across 11 and 10 stages, respectively, within the target Mid-Velkerri B shale formation by Santos QNT Pty Ltd, the operator of EP 161.
“Tamboran holds a 25% non-operated interest. Gas is flowing to surface from both wells, which are currently de-watering and undergoing clean-up activities.
“The company plans to update the market with information regarding the 30-day flow test in the first quarter of calendar year 2022.
“Achieving successful flow to surface from the deepest and longest successfully stimulated horizontal well in the Beetaloo Sub-basin is an important milestone for Tamboran and our joint venture partner Santos."
Next steps
Riddle continued: “Tamboran expects to announce further updates relating to the flow performance following the initial 30 days at regular intervals.
“This will provide important information on steady-state production, support the calibration of type-curves and help us understand well deliverability and estimated ultimate recovery.
“This evaluation process is in-line with standard unconventional reporting best practice.
“The estimated steady production commerciality threshold for wells within the Beetaloo Sub-Basin is 3 million standard feet per day per 1,000-metre horizontal length, based on third-party industry analysis.
“As we have seen with other unconventional basins, development wells are expected to be drilled with horizontal sections of up to 3,000 metres, providing increased recoveries at a significantly lower unit cost.
“Steady-state production from development wells of 3,000 metres could be extrapolated linearly, with commerciality potentially achieved at 9 million standard cubic feet per day.
“This is consistent with data across several US unconventional basins.”
NSAI commission
While Tamboran waits on further information from the two wells, Netherland Sewell and Associates, Inc (NSAI) has been commissioned to provide an independently certified resource estimate, which could result in a contingent resource booking during the March quarter of 2022.
Riddle concluded: “Tamboran has commissioned NSAI, a leading third-party resource certifier, to provide a revised independent resource report.
“This could potentially lead to Tamboran booking an initial contingent resource across EP 161 during the March quarter of 2022.
“Tamboran’s experienced unconventional team continue to incorporate learnings from the current drilling program into the drilling of our 100% owned and operated Maverick 1H well in EP 136.
“The well is expected to spud in mid-calendar year 2022, subject to final regulatory approvals.”