Two major gas discoveries in less than two months: Omega Oil & Gas

Omega Oil & Gas (ASX: OMA) has made two major gas discoveries in less than two months in the Surat Basin in Queensland. The company drilled two wells, Canyon-1 and Canyon-2, which targeted the prospective Kianga and Back Creek formations.

Canyon-1 was drilled to a total depth of 4,000 metres and intersected 424 metres of gas-rich zones, well above the 293 metres intersected at Canyon-2. The company said that the formation thickness in Canyon 1 was thicker than what was intersected in Canyon 2.

“Our expectation was a continuation of the same results from Canyon 2. However, drilling has shown an even greater thickness of hydrocarbon-rich zones in the Kianga and upper Back Creek Formations, demonstrating that the gas play at both target formations is extensive,” said Managing Director Lauren Bennett.

Omega says it will announce wireline logs and hydrocarbon composition results shortly. These results measure properties of the well such as the porosity and permeability of rock formations and fluids.

Previous wireline logs at Canyon-2 returned better-than-expected porosites that averaged more than 9%, which exceeds that of Shell’s Tasmania-1 discovery well.

Next steps: Hydraulic Stimulation Testing

Omega has engaged specialist engineers to analyse the data acquired from Canyon 1 and 2 to design upcoming hydraulic stimulation tests. Hydraulic stimulation is a process used to increase the production of oil and gas from a well. It involves injecting a fluid, typically water, sand and chemicals, into the wellbore at high pressure. This fluid fractures the rock surrounding the wellbore, creating new pathways for oil and gas to flow to the wellbore.

Hydraulic stimulation is a complex process that requires careful planning and execution. If it's not done correctly, it can damage the wellbore or reduce the production of the well.

Omega’s story so far

Omega Oil & Gas debuted on 25 October 2022 after raising $15 million at 20 cents per share. The stock hovered around the 17-20 cent level until April – when newsflow started to ramp up. This included:

• 13 April: Canyon-2 Intersects 293m of gas shows (+35.9%)

• 27 April: Net reservoir and porosity better-than-expected at Canyon-2 (+17.8%)

• 23 May: OMA’s first drilling campaign confirms major system (+13.0%)

Omega Oil & Gas price chart (Source: Market Index)

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