Oil and gas explorer Vintage Energy (ASX: VEN) has announced an upgrade to the carbon dioxide resource estimate of its Nangwarry field in South Australia’s onshore Otway Basin.
Following the independent review of data from extended flow testing of the Nangwarry-1 well, the Nangwarry best case saleable carbon dioxide resource estimate has been revised from 25.1 billion cubic feet to 25.9 Bcf.
In addition, production testing confirmed higher than anticipated raw gas flow rates of 10.5-10.8 million cubic feet per day – well exceeding the 3MMcfd required to supply a commercial purification plant with a 150 tonnes-per-day capacity.
Nangwarry joint venture
Vintage operates PRL 249, containing the Nangwarry field, in a 50:50 joint venture with Otway Energy, a subsidiary of Lakes Blue Energy (ASX: LKO).
Vintage has also been appointed on behalf of the joint venture as the marketing agent to commercialise the Nangwarry field.
“The recent appointment of an in-house commercial manager, along with BurnVoir Corporate Finance as a corporate advisor, provide the appropriate resourcing to investigate and negotiate a beneficial outcome on behalf of the joint venture for commercialisation of this excellent resource,” the company stated in today’s announcement.
Increasing confidence in the Nangwarry resource
The initial estimate, released in August 2020, was based on measurements made during the drilling of the Nangwarry-1 well.
While only representing a 3% increase, Lakes Blue Energy said the upgrade “greatly increases the confidence in the size of the Nangwarry-1 resource”.
“The company, with joint venture partner Vintage Energy, is now well placed to progress works towards establishing arrangements for commercial development of Nangwarry to produce food-grade carbon dioxide,” Lakes Blue Energy chairman Richard Ash said.
The SA Department of Energy and Mining also recently approved an application for a retention licence over the Nangwarry discovery, meaning the joint venture retains a significant amount of land around the field while it pursues options for commercial development.
Food-grade carbon dioxide has been in high demand since the depletion of the onshore Otway Basin well Caroline-1 in 2017. Some industrial uses for the gas include the carbonation of soft drinks, juices and beer, winemaking, medical devices, cold storage and in the preparation of paints and varnishes and the manufacturing of foam rubber.