Blue Energy completes first horizontal in-seam section of Sapphire Block appraisal program
Blue Energy aims to feed the east coast market with gas from its permit ATP-814 in Queensland’s north.
Blue Energy (ASX: BLU) has now drilled more than 1,000m of the first horizontal in-seam section of the Sapphire 5L1 lateral well of the current appraisal program at the Sapphire Block of ATP-814 in Queensland.
The company has engaged Silver City Drilling, which is undertaking the Sapphire Block well appraisal program, and is now completing the build sections of the four Sapphire 5L pilot wells.
Drilling of the horizontal Sapphire 5L1 well has intersected the Sapphire 5V vertical well that was finished earlier in the campaign.
The rig will run a 3.5-inch liner in the lateral well and suspend it for production testing, which will be carried out once all four lateral pilot wells have been completed.
Once the liner has been run, the rig will move to Sapphire 5L2 to drill a similar 1,000m in-seam section. This well is targeting a slightly shallower and separate coal seam to Sapphire 5L1.
All-up, the Sapphire 5 well set includes the Sapphire 5V vertical well and four separate lateral wells that intersect individual coal seams and Sapphire 5V.
Blue is also completing a Sapphire 6 well set that comprises the Sapphire 6V vertical well and up to four separate lateral wells.
The vertical wells act as the water producer for the lateral wells. The lateral wells meter and measure the gas flow from each individual coal seam, which allows for better allocation of seam specific reserves.
Accelerated development to meet east coast demand
In July, Blue raised $20 million to fund accelerated exploration and development at the Sapphire Block and the wider ATP-814 permit.
“It is clear that there is an understanding from investors of the importance of natural gas supply into the east coast market and the reliance of manufacturing on natural gas, as well as the need for natural gas as a supply for gas fired electricity generation to firm the increasing levels of wind and solar energy in the national energy market mix,” Blue managing director John Phillips said.
The appraisal program underway aims to build reserves at ATP-814, which currently has 3P-plus-2C aggregate resources of 467.1 petajoules of recoverable gas.
Blue already has existing supply agreements with EnergyAustralia and Origin Energy (ASX: ORG) to supply a combined 400PJ of gas at Wallumbilla for the domestic market over 10 years.