Galilee Energy (ASX: GLL) has reported first measured gas flow from two wells at a production pilot program for its flagship Glenaras coal seam gas project, in western Queensland’s Galilee basin.
Metered gas rates of up to 20,000 standard cubic feet per day in aggregate have been recorded from the 10L and 12L wells during the project’s pilot phase, with rates continuing to increase as fluid levels in the wells are reduced and more coal area is drawn down below the critical desorption pressure.
Both wells are on continuous production with water rates of approximately 3600 barrels per day in aggregate from each.
The surface facilities – originally designed for 2000bwpd per well – were upgraded to accommodate Glenaras 12L which is producing approximately 2500bwpd.
A higher capacity transformer and variable speed drive were procured, installed and commissioned to enhance flow capacity at the well with the aim of achieving around 3000 bwpd capacity.
The upgrades required a number of small shutdown periods to facilitate the equipment installation, with residual benefits being the validation of reservoir depletion within the pilot area.
“First measurable gas flows are a major milestone and this pilot continues to exceed expectations,” said Galilee managing director Peter Lansom.
“We look forward to seeing the increased drawdown of coal and gas production ramping up over the ensuing months.”
In July, Galilee successfully completed a targeted, private placement to institutional and sophisticated investors raising approximately $5.66 million to assist in progressing the Glenaras project and to meet other general working capital expenses.
An uncontracted resource
Situated within ATP 2019 in the western portion of the Galilee basin, the Glenaras project is highly prospective for coal seam gas, and is believed to be one of the largest remaining uncontracted gas resources on the east coast of Australia.
The project hosts an independently-certified 3C contingent resource within the Betts Creek coal beds of more than 5300 petajoules.
Galilee said Glenaras will be on production for an extended period to dewater and lower the pressure in the surrounding coal with a view to achieving a commercial gas flow.
At midday, shares in Galilee Energy were trading 4.79% higher at $0.765.