Omega intersects 293m of gas and liquid hydrocarbons at Canyon-2 well

Omega Oil and Gas (ASX: OMA) has announced “outstanding” exploration success at the Canyon-2 well in Queensland’s Bowen Basin, with an intersection of 293 metres of gas and liquid hydrocarbon shows.

The well is located within the highly-prospective Kianga Formation and upper Back Creek Group and correlates with historical discoveries in the area, including Shell Australia’s Tasmania-1 gas discovery well.

Canyon-2 is also a continuation of the oil discovery well Cabawin-1, which was cased, completed and put on production from the upper part of Kianga in the 1960s.

Kianga is the primary target of Omega’s current exploration program and was intersected at 3,367m.

Gas while drilling was recorded over the entire 221m interval of the formation.

Omega said associated liquid hydrocarbons are present at Kianga and upper Back Creek, with evidence of overpressure encountered while drilling through the Back Creek Group.

Exceeding expectations

Omega managing director Lauren Bennett said the results to date were “extremely positive” and exceeded expectations.

“We are very excited with these results and they are an excellent start to our Basin-centred gas drilling campaign,” she said.

“Preliminary analysis of the data would indicate that we have intersected a thicker gas column than initially forecast and we hope to confirm this with the results of our open hole logs.”

Strong gas presence

The strong presence of gas over the sandstones and coals of the Kianga Formation and the upper Back Creek Group has been considered “very encouraging” and the results will allow Omega to push forward with casing, completion and testing of the well.

“Given forecast gas supply shortages, finding and developing new sources of unencumbered gas is critical,” Ms Bennett said.

“Our proximity to well established gas infrastructure in Queensland as well as the clear requirement for more gas in major population centres to feed industry places us in a favourable position to build on our exploration success.”

Well spudding

The Canyon-2 well was spudded in March to a total depth of 3,807m, drilling through the Kianga Formation and the upper Back Creek Group.

Omega has moved to install a 4.5 inch production casing to total depth and the well will be suspended for completion before hydraulic stimulation and flow testing during the next phase.

Design of the stimulation program will be reliant on data from Canyon-2 plus existing completion and production data from surrounding wells to enhance the chances of success.

The upper Back Creek is a potential additional reservoir, with significant gas peaks being recorded while drilling over an interval of 72m.

The upper Back Creek Group was intersected at a depth of 3588m.