Gas production tests continue to exceed expectations at Vintage Energy’s (ASX: VEN) Nangwarry-1 well in South Australia’s onshore Otway Basin with strong carbon dioxide flowing back from the Top Pretty Hill formation.
The oil and gas explorer today announced the completion of flow testing across the targeted zones in this formation with the well continuing to produce at strong rates of 10.5-10.8 million standard cubic feet per day through a 48/64-inch choke over a 36-hour period at a relatively stable wellhead pressure of 1,415 psi.
Vintage managing director Neil Gibbins said the well also delivered rates as high as 22 MMscfd (from choke calculations) over shorter periods.
“To put this flow rate into context, production of 150 tonnes per day of carbon dioxide only requires a flow rate of approximately 3 MMscfd. Clearly this well has productive capacity in excess of this,” he said.
Mr Gibbins pointed to the highly profitable Caroline-1 well which flowed gas for almost 50 years at around 2 MMscfd producing almost 800,000t carbon dioxide over its life. To compare, this is less than the best (mid case) estimate for Nangwarry-1.
“We are confident that, based on data to be collected from the shut-in over the coming weeks, Nangwarry-1 will exceed the current best (mid case) estimate.
“Once we have this information, we will seek to expedite the next stage of activities and focus on the potential development of the reservoir,” he added.
Nangwarry-1 lies within PEL 155 and is located about 40km from Caroline-1, which ceased production in 2017 but remains South Australia’s most profitable well to date.
Vintage holds 50% of PEL 155 in partnership with non-listed Otway Energy Pty Ltd as operator.
Growing need for food-grade carbon dioxide
This production test is a key milestone on Vintage’s path to first production of food-grade carbon dioxide as it will confirm volumes of saleable carbon dioxide and allow the joint venture to consider debt funding options for the infrastructure required.
Vintage signed a memorandum of understanding with Supagas last year to commission preliminary design work for a skid mounted carbon dioxide plant, which is expected to be powered by the co-produced methane (about 10%).
Mr Gibbins said a stable source of carbon dioxide is currently in high demand, both here in Australia and globally, especially given the cessation of production from Caroline-1.
“With the use of dry ice for storage of vaccines, and the need for carbonation in the production of soft drinks and beer, we believe that demand will only continue to grow over the coming years,” he added.
Food-grade carbon dioxide is also used in firefighting, medical devices and winemaking.