Pilot program at Glenaras gas project gives Galilee Energy insight into Betts Creek coal sequence

Galilee Energy ASX GLL Betts Creek Glenaras gas coal
The Glenaras pilot well in Queensland continues to produce strongly with water rates at about 6,000bpd and gas rates quickly recovering.

A multi-lateral pilot program at the Glenaras gas project in Queensland’s onshore Galilee Basin has provided Galilee Energy (ASX: GLL) with positive information on the reservoir characteristics and vertical connectivity of the coal-bearing Betts Creek sequence.

Galilee previously announced that drilling of the Glenaras 17A monitoring well provided a significant breakthrough in understanding the production characteristics of Betts Creek.

Current work has confirmed the entire sequence is acting as one contiguous system which is being depleted by the existing multi-lateral pilot well.

It has also confirmed the sequence is isolated from other significant aquifer systems, particularly the overlying Hutton sandstone and Great Artesian Basin.

Galilee said the pilot well continues to produce strongly with water rates at approximately 6,000 barrels per day and has achieved a significant pressure sink in the pilot area, which is about 85% progressed towards the critical desorption goal.

It added that “clear potential” exists to increase the initial 2P reserves target to around 1,000 petajoules.

Implications

Galilee said the monitoring well results have important and positive implications.

“This vertical connectivity helps to explain continued strong water production rates and pressure support observed in the R3 coal at the pilot,” it said.

“The vertical connectivity is allowing other layers within the section (from the R1 through to the R7) to contribute and provide crossflow support [and] is the key reason why the pilot is taking longer to achieve critical desorption in the timeframe we expected.”“It also helps explain the performance of some of the legacy well pilots nearby,” the company added.

Future drilling

The identification of a strong vertical connectivity within the full Betts Creek section holds benefits for future drilling and field development planning.

“The fact that there is such strong natural vertical connection within the sequence now, provides strong support that any future drilling, including any additional drilling within the pilot area to accelerate results, will most likely be conducted using vertical wells completed over the entire Betts Creek section,” the company said.

According to Galilee, this simplifies and reduces the capital costs of any future drilling activities as “it is more efficient to drain all layers of the Betts Creek section via vertical wells than to use more complex lateral wells draining from a single layer”.

Reservoir modelling

Schlumberger has been engaged to perform a reservoir simulation study at Glenaras, consisting of reservoir modelling to history-match legacy vertical pilots in the area with data the current pilot.

The modelling will employ multiple cloud-based computer systems to analyse optimum future drilling and completion designs as well as the number of wells required to achieve a commercial outcome.

Galilee said there was sufficient production and pressure data to define the reservoir performance more accurately.

“The results of this study will be used to develop a forward work program by refining the drilling design and number of wells required to reach critical desorption,” the company said.

The work is expected to be completed before mid-year.

At early afternoon, shares in Galilee were trading 17.78% higher at $0.53.