BRISBANE, AUSTRALIA (ABN Newswire) – The December 2022 quarter (Quarter) and January 2023 will be eventful for both the energy sector and State Gas Limited (ASX:GAS) (OTCMKTS:STGSF) was.
– International and domestic gas markets remain strong, and global energy demand, especially gas, remains high.
– National Gas continues to focus on developing projects and commercializing its resource base as soon as possible. We remain committed to increasing the value of our assets and generating attractive returns on capital by commercializing our projects in the short to medium term.
– The federal government’s intervention in domestic gas pricing has created an environment of uncertainty for the industry and has drawn significant criticism from industry players and the Australian business community at large.When
– Demand for domestic gas remains high and is expected to remain so in the near future, despite the disruptions caused by regulated price interventions, with no credible supply-side drivers that can boost supply in the short to medium term. . Government price caps can have the unintended consequence of increasing price volatility, thereby benefiting spot gas suppliers.
Rougemont Well Production Test
State Gas’ Rolleston-West Project (ATP 2062) targets Bandanna Formation coal measures. These are the same coal countermeasures already in commercial production in the Arcadia Valley to the southeast and under development in Mahalo to the north. Rougemont-3 consists of two side wells drilled laterally through a highly permeable coal seam identified by the previously drilled Rougemont-2 well. The lateral connects to the Rougemont-2 vertical wellbore and allows the vertical-dual horizontal well system to be tested as a single unit.
Rougemont 2/3 has been in production trials since November 21, 2022, pumping water at a rate of approximately 2 meters per day. The wells are consistently down to 120 meters as expected (the first coal seam is 356 meters deep) and consistently produce small amounts of gas. This is a good sign. Production trials produced more water than originally predicted, indicating a highly permeable coal seam within the two lateral wells. Therefore, lower water levels could increase gas production from these coals.
CNG Trucking (“Virtual Pipeline”) Project
The Company has made significant progress towards meeting its deadline of delivering first gas production from its natural gas reserves near the northern end of PL 231, with compressors expected to arrive in February 2023. Introduce gas into existing pipeline infrastructure (“CNG Project”). The CNG project will allow State Gas to generate moderately positive operating cash flow and supply approximately 1 TJ of new gas per day to a market that is expected to remain in short supply. Engineering, design, and preliminary prefabrication activities were completed during the quarter, enabling on-site construction and commissioning to begin in late February 2023. Gas from the CNG project will be sold on the spot market. Announced price cap of $12/GJ. Project operating costs are estimated to be well below $12 per GJ.
Proposed federal intervention in gas pricing
During the quarter, State Gas worked with other industry players and business leaders to respond to significant regulatory price interventions in the gas industry. This intervention allows the federal government to determine the contract price of gas for the next 12 months and then significantly influence it. In our view, it is supply-side factors that are pushing up domestic gas prices, and the introduction of price caps will not alleviate that situation in the medium term. We believe that price interventions will have a significant negative impact on investor sentiment in the energy sector and, conversely, exacerbate the existing challenges of reliable energy supply.
Although State Gas is excluded from the price caps announced in Canberra just before Christmas, the company remains committed to stimulating domestic gas demand and limiting gas price volatility as long as the government’s attempts to control prices remain effective. i think it will make it worse.
State Gas’ pioneering efforts to create a demand-responsive (“capital light”) trucking solution could be a net beneficiary of the unintended consequences of this policy.
State Gas will continue to lobby against this regulatory intervention as part of its broader industry response and will update shareholders on the impact as more details emerge in future quarters. On December 13, 2022, a copy of the filing was released to the ASX for further consultation and discussion.
*To view the full quarterly report, please visit:
https://abnnewswire.net/lnk/KR770NK6
About State Gas Limited:
State Gas Limited (ASX:GAS) is the Queensland-based developer of the Reid’s Dome gas field, first discovered during drilling in 1955 in the Bowen Basin of central Queensland. State Gas is the 100% owner of the Reid’s Dome Gas Project (PL-231), a CSG and conventional gas play, 30 kilometers southwest of Roleston, the Queensland Gas Pipeline and interconnected East Coast Gas Network. It is conveniently located about 50 kilometers from .
Permian coal measures within Reid’s Dome Beds are extensive throughout the permit, but prior to State Gas’ ownership, the area had not been surveyed for coal seam gas. In late 2018, State Gas drilled the first coal seam gas well in the region (Nyanda-4) into Reid’s dome formation, establishing the potential for a significant coal seam gas project at PL 231. The core of the permit was confirmed by drilling at Aldinga East 1A (12 km north) and Serokold 1 (6 km north of Nyanda 4) in late 2019.
State Gas is also a 100% holder of Prospect 2062 (“Rolleston-West”), a 1,414 km2 permit (eight times PL 231) adjacent to Reid’s Dome Gas Project. Rolleston-West contains highly promising targets within the permit area for both coal seam gas (CSG) and known conventional gas. No restrictions due to domestic gas reservation requirements.
The adjoining territories (Reid’s Dome and Rolleston-West), which are solely owned by State Gas, allow consolidation of activities and integrated super gas field development, offering economies of scale, efficient operations and marketing options. increase.
State Gas is executing a strategic plan to address short-term forecast shortfalls in the East Coast domestic gas market by bringing gas to market from Reid’s Dome and Rolleston-West.Strategy includes progressing through a phased assessment program
sauce:
National Gas Co., Ltd.
contact:
Lucy Snelling Head, Corporate and Commercial E: lucy@stategas.com Richard Cottee Executive Chairman E: richard@stategas.com