Australia
Mahalo Project, Northern ATP 337P - Bowen Basin, Queensland, Comet Ridge 40%
Comet Ridge is earning a 40% interest in part of the Santos operated ATP 337P permit in the Denison Trough of central eastern Queensland.
This area is prospective for coal seam gas in Permian aged coals that are draped over a large north-south trending structural high known as the Comet Ridge. These coals have proven to be productive at the Fairview and Spring Gully CSG development projects (Santos Limited and Origin Energy CSG Ltd) some 150 km to the south on the same structural high.
Two core holes, Mira 1 and Humboldt 1, were drilled during February 2006 (Figure). These holes were drilled to verify the thickness, gas content, and permeability of the Permian aged Bandanna Formation coals in the eastern part of the project area. The results are encouraging.
Comet Ridge engaged Dr. John Seidle, Senior Reservoir Engineer of Denver, Colorado based Sproule Associates, to derive permeability measurements from the results of four drill stem tests run in the two holes. Dr. Seidle is a recognised expert on coal seam gas reservoir engineering and as experience in many countries and coal seam gas developments.
Permeability, the measure of how well a coal reservoir can flow gas and water, can be determined by careful analysis of the pressures recorded down hole when a drill stem test is conducted. A drill stem test comprises of a series of flowing and shut-in periods during which the pressure changes are measured by accurate down-hole pressure gauges. These pressure data are analysed by specialists such as Dr. Seidle, to determine the permeability and also to indicate any damage created during the drilling process (mud and mud filtrate are quickly imbibed into the coal and fill up the cleats or micro-fractures in the coal).
The tested zones have interpreted coal permeabilities in the range of 6 to 56 millidarcies. These permeability figures are similar to those recorded at other commercial coal seam gas developments in Queensland.
Gas contents for the wells cored to date have ranged from ~5.0 m3/t to 7.6 m3/t. Average gas content for all coals encountered has been ~6.5 m3/t which is comparable with gas contents of other similar coal seam developments in the region.
In place gas resource estimates for the project range between a low of 180 BCF to almost 1,000 BCF (or one trillion cubic feet).
Drilling of Mahalo 2, the fifth and final well in Comet’s earning program, after being repeatedly delayed due to rig availability was drilled in late August, 2006. The well was drilled to a total depth of 247 metres. No measurable gas or water flows were observed on penetration of the coals. This disappointing result suggests that either the coals have low permeability or that they were damaged during the drilling process. The apparent poor permeability observed in Mahalo 2 is inconsistent with the gas influx experienced in Mahalo 1 (drilled 100 metres from Mahalo 2) and the recent favourable permeabilities measured in the Humboldt 1 and Mira 1 holes. The operator is planning to conduct a pressure build-up survey to help determine why we failed to see a gas or water inflow.
Despite this setback the other 4 wells drilled as part of Comet Ridge’s earning program have demonstrated that there is a potential coal seam gas project at Mahalo. Comet Ridge has now fulfilled its earning obligation and has a 40 percent interest in the project.
