Blue Energy (ASX: BLU) enjoyed some rare air this morning as one of the few stocks to head north despite overall market down -3% nearing the end of play today.
The Brisbane based junior gas explorer/producer was up 6.25% an hour out from the close after announcing it has quadrupled the recoverable gas resource estimate for its wholly owned permit ATP 854 in Queensland’s Surat Basin.
What captured the market’s imagination this morning were revelations of an upgrade from 101 petajoules to 398Pj of 3C contingent resources based on a review by world-class independent certifier Netherland Sewel and Associates Inc (NSAI).
The company also noted that both 1C and 2C contingent gas resource categories also increased by more than 300%.
Aggregate corporate 3C recoverable gas resources (across Blue’s entire asset portfolio) have now increased by 7% with this upgrade to 4,476PJ.
Located near the heart of the coal seam gas (CSG) - LNG gas supply precinct with gas pipeline (PPL 30), linking Wallumbilla to Gladstone, the ATP854 gas resource is understood to have clear potential for near-term economic development using this infrastructure.
Given the gas offtake agreements Blue Energy has executed with Origin Energy and Energy Australia - to supply gas to them at the Wallumbilla hub - the company believes the resource upgrade presents the potential for more offtake deals to follow.
Within today’s announcement, the company noted that gas from the Surat Basin permit will be considered as a potential initial supply option for these supply agreements and to augment the company’s North Bowen Basin gas reserves and resources.
Blue Energy’s managing director John Phillips believes the resource upgrade signals the potential for a major new gas supply from ATP 854.
“The declaration of the four existing potential commercial area (PCA) applications lodged by Blue (and awaiting approval with the government) over this permit is vital for further appraisal to be undertaken so this new gas supply can be assessed and brought to the east coast domestic market as soon as possible.”
The company also holds gas assets in the North Bowen, Galilee and Beetaloo/Greater McArthur Basins in Queensland and the Northern Territory.
There is no consensus rating on this stock.
Get the latest news and media direct to your inbox