MATT CHAMBERS THE AUSTRALIAN MARCH 03, 2014 12:00AM
THE Cooper Basin could contain more gas than Santos thought after it fracked deep coal seams below its oil and gas fields.
The substantial gas flows have excited chief executive David Knox to the extent that he now says his Cooper Basin ground is now considered more prospective.
This could be good news for other Cooper producer explorers that sit above the deep coals, including Senex, Beach Energy, Strike Energy, Ambassador Oil and Gas and DrillSearch.
In its full-year results Santos revealed its Moomba-194 vertical well had flowed at the strong rate of a million cubic feet of gas a day from coal seams 3km deep after what it called some innovative hydraulic fracturing (fracking).
"The deep coal is field-wide. If that produces gas, and we've demonstrated it does, then this is extremely exciting," Mr Knox said.
When challenged on a post-result investor call about his confidence in overall basin reserves, the Santos boss again mentioned the coals.
"Our belief in the prospectivity of the acreage has not changed," he said.
"In fact, the recent results probably improved that belief, particularly around the deep coal."
Santos first extracted gas from the Cooper's deep coal in 2007 at its Moomba-77 well, which flowed at 100,000 cubic feet a day.
Last year, Senex flowed coal from the Paring-2 well at about the same rate.
When Origin Energy last week signed a $252 million deal to enter Senex's Cooper Basin ground, it listed exposure to deep coal seams, along with shale and tight sands, as among the unconventional gas sources it was chasing.
The player with the most exposure to the Cooper Basin coals is Strike Energy, which has been funding its exploration program by doing joint ventures with potential gas buyers Orica, Orora and, last week, Brickworks.
Strike's main Cooper Basin focus is coal. "The Santos results are relevant for us because the coals that we are looking at are the same or the equivalent coals that Santos fracked and flowed, but we are 800 to 1000m shallower," managing director David Wrench said.
"It's good for us and we're pretty pleased there is someone else in the industry now playing the coal seriously."
The Moomba-194 flowed at a total rate of 3.1 million cubic feet of gas a day, with roughly equal flows from shale, tight sands and deep coal targets, Santos said.
The well is expected to be the nation's second commercial shale well.
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