Glenaras coal seam gas pilot program performs strongly for Galilee Energy

Galilee Energy ASX GLL Glenaras coal seem gas pilot program well
Galilee Energy plans to ramp up production over the coming weeks to achieve full reservoir drawdown.

Gas developer Galilee Energy (ASX: GLL) has reported strong performance from a multi-lateral pilot program at its Glenaras coal seam gas (CSG) project in Queensland’s Galilee Basin.

The pilot program, which involves the production testing of two lateral wells, Glenaras 10L and Glenaras 12L, plus a third monitoring well, Glenaras 11L, was brought on line for continuous production in mid-June.

Galilee today reported that the two lateral wells had demonstrated excellent water rates in excess of 2800 barrels of water per day (in total from both wells), with the current fluid level at around 530m from surface.

In addition, a direct communication has been identified between Glenaras 10L and Glenaras 12L, which is enhancing pressure drawdown in the pilot area.

Galilee managing director Peter Lansom described the results as “extremely encouraging”.

“The water rates are at the upper end of our pre-drill expectations,” he said.

“We have seen pressure drawdown in the monitoring well and the communication between the lateral wells is direct evidence of the reservoir shielding that we were anticipating.”

According to Galilee, the pilot will remain on production for an extended period of time to de-water and lower the pressure in the surrounding coal in order to achieve gas flow.

The Glenaras project has been independently certified to contain a 3C (proven, probable and possible) contingent resource of 5314 petajoules of gas.

Galilee’s aim from the pilot program is to ultimately convert a large portion of these resources into reserves.

Earlier this month, the company raised around A$5.66 million before costs via a placement to sophisticated investors, with part of the net proceeds assigned to progressing the Glenaras project.

“The company is now in a very strong financial position and, subject to continued strong performance of the pilot wells, is well positioned to progress the Glenaras gas project through to its maiden reserve booking,” Lansom said at the time of the capital raising.

Shares in Galilee rose 7.22% to A$0.52 by early afternoon trade. The company’s stock has almost doubled since production commenced at the pilot program a month ago.