Tamboran Resources Ltd (ASX:TBN) completed an active period in the December quarter as it moves to establish commercial flow rates within the extensive low carbon dioxide gas resource in the Core Beetaloo Sub-basin of the Northern Territory.
At the Santos Ltd (ASX:STO) operated EP 161 fracture stimulation of the Tanumbirini 2H (T2H) and Tanumbirini 3H (T3H) wells was completed, with both flowing gas to surface at the end of the quarter.
Significantly, gas continued flowing to surface folllowing a weather-related shut-in during early January 2022.
Tamboran will incorporate learnings from the Santos-operated EP 161 drilling program into its operated EP 136 Beetaloo drilling program and expects to spud in the Maverick 1H (M1H) well in mid-2022.
“Significant gas shows”
The company's managing director and CEO Joel Riddle said: “In EP 161, the Santos-operated calendar year 2021 drilling program was competed in late November following the successful drilling of T3H.
"The well encountered significant gas shows and pressures within the Mid-Velkerri ‘B’ shale target, in line with the results from the T2H well. The program was completed with no major safety incidents.
“Fracture stimulation of T2H and T3H within the Mid-Velkerri ‘B’ shale was conducted across 11 stages over a 660-metre lateral interval and 10 stages over a 600-metre lateral interval respectively during December 2021.
"Both wells were undergoing clean-up activities and flowing gas to surface at the end of the quarter. Operations were interrupted and the wells shut-in due to weather for a short period in early January 2022.
"Testing operations have since resumed and gas is continuing to flow to surface. We expect to be in a position to announce initial flow rates in the near-term."
LACA agreement
Subsequent to the end of the quarter, Santos and the pastoral leaseholder of Tanumbirini Station reached an agreement to resolve the Land Access and Compensation Agreement (LACA) process for EP 161.
Santos will continue flow testing, monitoring and maintenance at the T2H and T3H wells and conduct other low impact activities. No additional petroleum activities may be undertaken on EP 161 at Tanumbirini Station until after December 31, 2022.
During the December 2021 quarter, approximately $7.9 million was spent by Tamboran on its share of the current EP 161 joint venture drilling campaign.
EP 136 drill preparations
Tamboran continues preparations for exploration at the 100%-operated EP 136, EP 143 and EP(A) 197, which will include the drilling of M1H in EP 136.
The M1H well is planned as an appraisal of the Core Beetaloo to the southwest of EP 161. It is expected to include drilling and fracture stimulation of a horizontal section in excess of 1,000 metres within the Mid-Velkerri ‘B’ shale and an extended flow test.
“During the December 2021 quarter, we continued planning our 100%-operated drilling campaign in permit EP 136. The program is incorporating data and learnings from the recent program and aims to achieve reductions in drilling time and reduce costs,” Riddle said.
“Entering significant year”
“We are entering a significant year for the Beetaloo Sub-basin, as Tamboran plans to drill our M1H well in EP 136.
"The well will be drilled with an advanced frac design and will target commercial flow rates and support the booking of an initial contingent resource within our 100% owned and operated acreage.”
During the quarter, Tamboran spent $2.8 million ordering long-lead items in preparation for Tamboran’s CY2022 Beetaloo drilling program.
Well-funded
In November 2021, Tamboran completed a $35 million private placement, anchored by a strategic $20 million investment by Bryan Sheffield, the former chairman, CEO and founder of Parsley Energy Inc. The remaining $15 million was raised predominantly from existing shareholders.
Funds will be used to accelerate commercialisation of Tamboran’s 100% owned and operated EP 136 permit and working capital purposes.
Tamboran has commissioned Netherland Sewell and Associates, Inc, a leading third-party resource certifier, to provide an independent resource report.
The report will incorporate results from the EP 161 drilling program and has potential to lead to the company booking a revised contingent resource during the current quarter.
Planned near-term activities
During the March quarter, the company’s activities will be focused primarily on the Beetaloo Sub-basin assets, with activities expected to include the:
- Report initial flow rates of the T2H and T3H wells in EP 161;
- Preparations for drilling of the M1H appraisal well in EP 136; and
- Further details on the EP 136 seismic acquisition program.