Drill tests provide another boost for Aussie oil and gas explorer

Strong indications of gas have resulted from tests conducted by Omega Oil & Gas (ASX: OMA) at its Canyon 2 field, within the Kianga Formation in Queensland’s Bowen Basin.

Wireline logging – which provides detailed information about the properties of rocks and fluids – confirmed zones of high gas saturation. Analysis of the mud gas suggests liquid-rich gas zones. 

In this context, liquids include liquid petroleum gas and gases including methane and homologues (such as ethane, propane, butane and others).

Omega’s latest update indicates these results will now require verification by “postfrac” testing of the well. This is a stimulation technique used to enhance the productivity of a well, which will help determine the nature and concentrations of the various hydrocarbon components.

"The gas analyses and wireline logs continue to add to our knowledge of the system and deepen our understanding of the play,” says Omega’s managing director Lauren Bennett.

“The liquids-rich gas is likely to be positive for the economics of any potential future Canyon development, as revenue may be derived from sale of gas (mainly methane), and of natural gas liquids and condensate/light oil.”

Expert analysis underway

Elevated levels of gas encountered during drilling meant the rig crew needed to increase the density of the drilling fluid, in order to control the gas pressure. This suggests the presence of overpressure, similar to what was observed in other nearby wells. The overpressure is considered important for the production of gas in tight gas plays, as it can enhance gas flow from the reservoir.

In light of these characteristics, specialist engineers and petrophysicists have been engaged to analyse the data that is now available from Canyon 2, and which is due from Canyon 1 shortly.

What’s next?

• Post-frac testing to verify the nature and concentrations of the hydrocarbons encountered at Canyon 1

• Specialists are designing hydraulic stimulation testing, which will be different to those developed at other well sites Tasmania 1 and Shell’s QGC testing.

• Management has indicated further updates on Canyon 1 will be made available as testing progresses.

Disclaimer: Market Index helps small-cap ASX-listed companies connect with Australian investors through clear and concise articles on key developments. Omega Oil & Gas was a client at the time of publishing. All coverage contains factual information only and should not be interpreted as an opinion or financial advice.