Blue Energy to spud first lateral well of Sapphire Block gas appraisal program

Blue Energy ASX BLU gas North Bowen drilling campaign lateral well
Blue Energy will spud Sapphire 5L1 tomorrow Wednesday 3 August, and it will be the first lateral well of the Sapphire 5 set.

Blue Energy’s (ASX: BLU) appraisal program at the Sapphire Block within ATP 814 has moved to the first lateral well, Sapphire 5L1, of the campaign.

This follows the second well of the program, Sapphire 6V, which was vertical, reaching a total 900m depth. Blue has also acquired wireline logs and run production casing on the well to its total depth.

The rig has now been transported to the Sapphire 5L1 location, which will be the first lateral well for the Sapphire 5 set.

Blue anticipates Sapphire 5L1 will be spudded on Wednesday and will target the Goonyella upper coal seam.

Sapphire 5L1 will be drilled 1,000m laterally into that seam and intersect the Sapphire 5V vertical well, which was the first well of the entire appraisal program.

Each pilot well set includes up to four separate lateral wells, which accesses individual coal seams and the single vertical well.

The vertical well acts as the water producer for the lateral wells.

Placement funds additional appraisal drilling

Blue is well-funded to undertake its appraisal drilling at the Sapphire Block after raising $20 million in a placement late last month.

Some funds from the placement will be used to drill a duplicate set of lateral pilot wells at the Sapphire Block.

This is designed to accelerate the depressurising of the target coal seams, which would fact-track gas production from the pilot wells.

North Bowen Basin

ATP 814P is within Queensland’s North Bowen Basin and is directly adjacent to Arrow Energy’s Moranbah operation, which is one of Australia’s oldest gas fields.

During the June quarter, Blue focused on preparing for the current well appraisal program at the Sapphire Block, which has 2P gas reserves of 66.5 petajoules and 3P gas reserves of 253.2PJ.

The block has 3P and 2C aggregate resources of 467.1PJ of recoverable gas. To put this in context, the entire state of New South Wales consumes about 135PJ of gas each year.

Blue managing director John Phillips says it is clear new gas supplies are critical to power the east coast market and provide energy security.

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