Sacgasco flows more gas from Dempsey project

Sacgasco ASX SGC gas Dempsey project
Initial gas flare at Dempsey 1-15 Zone 2.

Onshore natural gas explorer and developer Sacgasco Limited (ASX: SGC) today announced additional flows from its Dempsey gas well, confirming the onshore Californian project as a significant discovery.

The company said a second zone of gas has flowed dry natural gas and no water, with initial shut-in pressures exceeding 6000 psi.

Sacgasco believed these flows were “most encouraging”, although analysis of the potential of the zone is still at an early stage with further test data required.

“This test, coming on the heels of the initial zone gas flows, confirms that Dempsey is indeed a very significant gas discovery in the Northern Sacramento Basin,” Sacgasco managing director Gary Jeffery said.

“Our activities to date confirm that extensive zones of gas saturated sediments exist at Dempsey, and by data and analogy elsewhere in the basin.”

Sacgasco began drilling the well in August and initially encountered four zones of interpreted gas saturated sandstones with net pay estimates ranging between 9 to 15 metres. The company then planned the drilling of at least five underlying targets.

Further gas shows were discovered in September, then a rig was moved to the well site in October to carry out a well completion and flow testing program.

Sacgasco also reported today that results of the first zone’s flow tests confirmed clean gas of pipeline quality with a better higher heating value than gas from the overlying reservoirs in the Rancho Capay Field.

The company plans to continue flow testing the well, noting several more zones to be tested below the field production level reservoirs.

Jeffery said Sacgasco was not yet able to comment on the commercial significance of the discovery, but would provide more information once further test results are analysed.

“While work is still ongoing on Dempsey, and this is our primary focus at this time, we have continued planning for a re-entry of the Alvares gas discovery well – a further reflection of our confidence that we are in the early stages of proving up a large petroleum system in the Sacramento Basin,” he said.

The Alvares well also lies in California’s Sacramento Basin and has been estimated to contain about 400 million barrels of oil equivalent in prospective resources.

Sacgasco operates the Dempsey gas project with a 50% stake. The remaining interests are held by Empyrean Energy (30%), Pancontinental Oil & Gas (10%) and Xstate Resources Limited (10%).

Shares in Sacgasco were up 4% on the news by midday trade.

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