Galilee Energy (ASX:GLL) is set to tap a promising coal seam gas (CSG) occurrence at its 100%-owned Glenaras project in Queensland after successfully completing a program of preparatory wellwork.
The company has completed workovers on five pilot wells at the site on time and under budget, allowing it to proceed with commissioning and test production.
This initial output from Glenaras will test the commercial flow potential of the promising uppermost R1 coal seam.
Successful results from the production testing will be crucial in improving confidence in the project area’s CSG contingent resources, which were upgraded last month as a result of the step out drilling and pilot production testing.
The work resulted in an 868% increase in contingent resources in the ‘best estimate’ 2C category to 2,507.5 picojoules.
The increase is considered to greatly improve the project’s economics and feasibility as a high-quality gas supplier to meet a forecast gas shortage on Australia’s east coast.
Analysis
This progress at Glenaras is significant because it positions Galilee to expedite production testing of the R1 coal seam, which has the potential to unlock significant value and recently expanded convert contingent resources into reserves.
Completion of all five workover programs at the site on time and under budget further highlights the company’s proficiency at executing strategy and delivering value at a foundation asset.
