ASX small cap tackling Australia's looming gas crisis

Omega (ASX: OMA) managing director Lauren Bennett hailed the important step as another milestone in helping to secure Australia’s energy security and phase out coal-fired power.

The Canyon-2 well in Bowen Basin, Central Queensland, will be drilled to approximately 3,600 metres with further work – including production testing – expected to be completed later this year.

Bennett notes the start of drilling, and the anticipated positive results it yields, comes amid a crucial period of conversation around the energy security of Australia’s east coast.

"The spudding of the Canyon-2 well is a significant milestone for Omega and is the culmination of months of hard work by the team and our campaign partners,” says Bennett.

“Projects like Omega’s Canyon play are critical to ensure vital gas resources continue to be discovered to meet strong future demand."

These points were also highlighted by Bennett in a recent video interview, where she spoke about the increasingly important role the natural gas produced by Omega - including the Canyon wells discussed here – play in Australia’s energy mix as it transitions toward net-zero carbon emissions.

A new gas well in Queensland's Bowen Basin

The Canyon-2 well has a 12.25-inch surface hole and will be drilled to an approximate depth of 3600 metres. 

The Schlumberger Land Rig 185 – a construction platform used in the well construction process – will then be mobilised to the Canyon-1 well pad, to drill a well of similar dimensions.

Omega will complete mudlogging - a process of detailed analysis of rock cuttings brought to the surface of the borehole by drilling. It will also complete open-hole wireline logging - which precedes the casing and cementing of the borehole interior. 

Both are considered key to finalising completion ahead of a fracture stimulation program – injecting large amounts of fluid to fracture the rocks to improve hydrocarbon flow – later in calendar 2023.

The programs being undertaken here are considered key to the development of Omega’s prospective gas resources, estimated at around 3 trillion cubic feet and 233 million barrels of associated liquid hydrocarbons.

The two Canyon wells underpin Omega’s Permian Deep Gas exploration program. The goal of these wells is to prove the viability of any gas finds in the Kianga Formation and the coals in the Permian-aged rocks of the Bowen Basin. 

Omega believes the Kianga Formation is gas-charged in what is regarded as a basin-centred gas play.

Further comments from Omega’s Bennett highlight the significance of the latest development.

“Projects like Omega’s Canyon play are critical to ensure vital gas resources continue to be discovered to meet strong future demand,” she says

“Gas will play an increasingly important role for energy security for decades, as ageing coal-fired power stations are scheduled to close. Additionally, gas will remain a key input for industrial and manufacturing processes.”

Further updates, including operational updates, will be provided as the drilling progresses.