First gas drilling activity in Bowen and Surat Basin in over a decade to commence by April 2023

Mon 06 Mar 23, 4:14pm (AEST)
Drilling - Oil or gas drilling rig
Source: iStock

Key Points

  • Omega Oil and Gas announced plans to begin drilling at its Canyon-2 well prior to April and noted the lease pad for Canyon-1 is also ready for rig installation.
  • It has awarded a fully integrated services contract to SLB for the project.
  • This sees Omega’s Permian Deep Gas two well program running on schedule and to budget.

Omega Oil and Gas (ASX: OMA) announced it is on track to commence deep gas drilling operations at its Surat Basin Canyon-1 and Canyon-2 leases by April on Monday. It also awarded a fully integrated services contract to SLB (NYSE: SLB).

These represent significant highlights in the progress of Omega’s Permian Deep Gas two well program.

The Omega Permian Deep Gas two well program

The Permian deep gas two well program covers exploration of two adjacent permit areas in the Bowen and Surat Basin of Queenland. It includes 250,000 acres and there’s a massive prospective resource of 3 trillion cubic feet of gas and 233 million barrels (mmbl) of liquids.

The significance of that prospect can’t be understated.

We’re facing a major gas shortage in coming years. The average Australian household consumes around 32 gigajoules of natural gas per year according to the 2019 census. A gigajoule is about 25.5 cubic metres. We’re looking at millions of households that could be serviced by these wells domestically and internationally.

It’s also worth explaining what deep gas is. It simply means gas that is deposited below conventional deposits. That is, conventional deposits are typically located a few thousand feet below the surface, whilst deep gas is 15,000 feet or more.

Omega has completed safety and operational standard checks by third-party inspectors on the SLB Land Rig 185 that will be installed on the Canyon-2 lease pad. The rig is expected to be mobilised this week, with drilling to begin (in mining lingo, ‘spudding’) before the start of April.

Site works for the Canyon-1 lease pad have also been completed.

The SLB fully integrated services contract

Omega requires a range of services in order to install and operate drilling equipment on its permit areas which is where SLB comes in. The contract covers mudlogging, drilling fluids, directional drilling, cementing and wireline logging and is considered the final step in procurement of key services for the project.

“Having the rig ready for mobilisation to site, the well pads completed and necessary services contracts finalised demonstrates significant progress on Omega’s Permian Deep Gas two well program. The achievement of these milestones are in line with the program schedule and represent another big step toward the company’s vision to de-risk gas projects of scale that can help arrest the significant forecast gas supply shortfall faced by the Australian East Coast market,” said Omega CEO Lauren Bennett.

On track and on budget

Bennett also noted as part of discussing these highlights that the Permian Basin Project was tracking on budget and to schedule. It was also a notable milestone for the region itself.

“Commencing drilling will be the first tangible activity focussed on the Permian Deep Gas in the Bowen and Surat Basin since British Gas executed its exploration wells in 2012,” said Bennett.

More operational updates will come as the company commences drilling activity.

Written By

Sara Allen

Content Editor

Sara is a Content Editor at Livewire Markets and Market Index. She is a passionate writer and reader with more than a decade of experience specific to finance and investments. Sara's background has included working at ETF Securities, BT Financial Group and Macquarie Group. She also holds a degree in psychology which drives a continued fascination with how human behaviour drives and is driven by investments and market activity.

Get the latest news and insights direct to your inbox

Subscribe free