Slide 1: Reid's Dome Gas Project: Technical Update Presentation
Heading Subheading Reid’s Dome Gas Project: Technical Update Presentation March 2019
Slide 2: Disclaimer
Disclaimer • This presentation (Presentation) has been prepared by State Gas Limited (ACN 617 322 488) (State Gas). The Presentation and information contained in it is being provided to shareholders and investors for information purposes only. Shareholders and investors should undertake their own ev
Slide 3: Gas at Reids Dome
Gas at Reids Dome GAS
Slide 4: State Gas - PL 231 Highlights
State Gas - PL 231 Highlights • PL-231 is located in central Queensland, granted under the 1923 Act over PRODUCTION LEASE & 181 km2 over Reid’s Dome anticline for a 30 year term from 15/12/2005. PIPELINE SURVEY Pipeline Survey Licence PSL-2028 was granted for a 2 year term from LICENCE 01/08/2018 OW
Slide 5: Location
Location • PL-231 lies ~50 km south west of Rolleston in central Queensland • Granted under the 1923 Petroleum & Gas Act for a 30 year term from 15/12/2005. • Field activities only require 10 days notice to Land-owners and DNRM • Permit area ~181 km2 over Reid’s Dome anticline • Pipeline Survey Lice
Slide 6: Infrastructure, PSL 2028 (Pipeline Survey Licence)
Infrastructure, PSL 2028 (Pipeline Survey Licence) • ~47 km to Queensland Gas Pipeline network connection options to the north- east and south-east • Favourable location for connection with east coast pipeline network 6
Slide 7: Possible Pipeline Route
Possible Pipeline Route • Connecting PL 231 with the Queensland Gas Pipeline (PPL 30/116) QGP facility, • Utilizing road reserve Arcadia MLV where possible – incl. Rewan Road and Wyseby Road • Possible synergies with Santos/Origin’s ATP 1191 and PL 451 • Approximately 47km of new pipeline to connect
Slide 8: Simplicity of Land Ownership
Simplicity of Land Ownership Northern landowner Southern landowner PRIMERO WEST 1 NYANDA 4 Aldinga Nyanda • Two Land-owners • Framework established for land-owner agreements (used for 2018 drilling program) • Freehold land with no native title 8
Slide 9: Overlapping Tenure
Overlapping Tenure • Two overlapping tenures, • EPC 833, Peabody • EPC 1408, Matilda Coal • Joint Interaction Management Plans (JIMP) in place • No minable coal defined within the PL-231 area • Coal seams typically 1 – 4 m thick and deeper than 390m, unlikely to be suitable for mining 9
Slide 10: Reid's Dome Gas Project - Next Steps
Reid’s Dome Gas Project - Next Steps An Important Strategic Juncture • State Gas operates successfully with a small, focused team • State Gas has received approaches and interest from experienced industry participants to progress the Reid’s Dome Gas Project • Corporate (company-level) or partnering
Slide 11: Denison Trough Structural Setting
Denison Trough Structural Setting • NNW rift basin initiated in the Early Permian characterized by linked pull- apart half-grabens • Triassic – Jurassic compression led to creation of large inversion anticlines AOE-1 Denison Trough structural elements Denison Trough wells and seismic data 11
Slide 12: PL-231: Anticlinal Structural Setting
PL-231: Anticlinal Structural Setting • Surface geological mapping of the Reid’s Dome area indicates strike of NNE – SSW with trans-tensional offset in the central region • The Sericold Anticline plunges gently to the north and south within the permit area. The western limb dips slightly more steepl
Slide 13: Denison Trough Stratigraphy
Denison Trough Stratigraphy • Proven petroleum system • Permian reservoirs, source rocks and seals • Structural and stratigraphic traps • Conventional and unconventional plays 13
Slide 14: Location
Location • PL-231 lies ~50 km south west of Rolleston in central Queensland • Permit area ~ 181 km2 over Reid’s Dome anticline • Pipeline Survey Licence PSL- 2028 was granted for a 2 year term from 01/08/2018 • Only two landowners within permit area • Freehold land with no native title 14
Slide 15: PL-231: Seismic Data
PL-231: Seismic Data LEFT: existing seismic data, short lines, multiple vintages, ERI Reids Dome-3 0.5 – 3.0 sec. Images at same scale AOE-2 RIGHT: incomplete WOWCO 1980 seismic data estimated Nyanda-3 location (lost navigation data) Southern Cross, Reids Dome and Aldinga seismic surveys reprocessed
Slide 16: AOE-1 Well Recap
AOE-1 Well Recap Spontaneous Potential Resistivity • Drilled in 1954 on surface anticline • Discovered gas @ 142m in the Cattle Creek Formation • Tested @ 550 mscfd • Net Tested Pay = 8.2m • Avg. core permeability = 14 mD • Avg. core porosity = 17.7% • Gas at 1359m and 822m in the Reids Dome Beds (R
Slide 17: Reids Dome Beds Pre-Drill Well Correlation
Reids Dome Beds Pre-Drill Well Correlation Bandanna-1 Nyanda-1 AOE-2 AOE-1 Meteor-1 Cattle Creek Datum Top RDB Reid’s Dome Beds Blue and red neutron RDB coal and density spikes in measures Nyanda-1 indicate coals • Top of Reids Dome Beds defined by base-line increase in resistivity and change in neu
Slide 18: PL-231: Summary of Geological Data
PL-231: Summary of Geological Data • 17 wells, drilled 1955 – 2018 • AEO-1, AOE-2, Aldinga North-1, Aldinga East-1, Aldinga West-1, ERI Reids Dome-2, ERI Reids Dome-3, ERI Reids Dome-4, ERI Reids Dome-5, MNX Reids Dome-1A, Nyanda-1, Nyanda-2, Nyanda-3, Nyanda-4, Nyanda North-1, Primero-1, Primero We
Slide 19: 2018 Drilling Program
2018 Drilling Program (November – December 2018) 19
Slide 20: 2018 Drilling Program (November-December)
2018 Drilling Program (November-December) Two wells successfully drilled, demonstrating State Gas’ operating ability to undertake a drilling program from new target identification/inception to completion in under 4 months • Primero West-1 • Shallow conventional over-pressured gas • Located ~650m sou
Slide 21: Nyanda-4 Drilling Results
Nyanda-4 Drilling Results Nyanda-4 Results • Reid’s Dome Beds CSG and Tight Gas Sands objectives • Total depth: 1,200m • Cored-zone: 150m of coring from 394m • Gas bubbling from coal core, sandstones hissing Net coal in core: 11.3m Net coal in well 40.4m Carbonaceous shales: 25m Total: 65m • Average
Slide 22: Nyanda-4 Core
Nyanda-4 Core • Well-cleated coal and shale zones with open fractures Coal core and carbonaceous shale samples from upper Reid’s Dome Beds within Nyanda-4 Coal is generally bright black, and well cleated Coal occurs within dark grey carbonaceous claystone, with sharp upper and basal contacts Minor p
Slide 23: Nyanda-4 Net Coal Determination
Nyanda-4 Net Coal Determination 1. Core described to determine net coal-bearing intervals (11.3m) 2. Core-to-log correlation 3. Determine relationship of wireline logs to actual coal beds for cored interval 4. Apply relationship to entire Reid’s Dome Beds interval • Best fit with core where Density
Slide 24: RDB PL-231 Well Correlation, Coal Seams
RDB PL-231 Well Correlation, Coal Seams Nyanda-4 AOE-2 AOE-1 Datum • Core descriptions from Nyanda-4 indicate low energy lower coastal plain to esturine environment of FAULT deposition (missing section) • Coals probably formed in wide- spread lagoons and back- barrier swamps leading to laterally con
Slide 25: Nyanda-4 Conventional Gas
Nyanda-4 Conventional Gas Condensate / gas bubbles on sandstone core from Nyanda-4 under UV light Key: Yellow stippled = sandstone reservoir, Pink = gas/condensate, Light Blue = coal • Conventional gas: Gas and condensate noted bubbling and hissing from sandstones in Nyanda-4 core samples • Numerous
Slide 26: Nyanda-4 Log Analysis
Nyanda-4 Log Analysis • Complicated petrophysics, • Shale clasts masking sand response • minor pyrite masking coal response Pyrite in coal • RCA, SCAL, SEM etc. required from Nyanda-4 26
Slide 27: Primero West-1 Drilling Results
Primero West-1 Drilling Results Primero West-1 Results • Successfully drilled in accordance with the requirements of the Joint Operating Agreement to appraise the “Primero Gas Sand” in the Cattle Creek Formation • Located ~650m west of AOE-1 • Shallow conventional reservoir, TD 250m • Challenging dr
Slide 28: Primero West-1 Well Correlation
Primero West-1 Well Correlation Primero West-1 Aldinga East-1 Aldinga West-1 Primero-1 CATTLE CREEK FORMATION highest known water SCD Rig-25 on location at Primero West-1 Datum = 0 mSS 28
Slide 29: Primero West-1 Drilling Results
Primero West-1 Drilling Results Cattle Creek Formation conventional play: • Gas encountered from 131.5m within the Cattle Creek Formation • Average porosity ~20% • Average Sw ~ 40% (petrophysical uncertainty on Rw, a, m and n) • Net gas-bearing zone of up to 12.5m • Maximum gas flow rate of 0.436 mm
Slide 30: CSG Volumetrics
CSG Volumetrics 30
Slide 31: Basis of CSG volumetrics; 1
Basis of CSG volumetrics; 1 • Average Raw Gas content: 11.6 m3/t (to date). Gas content for thickest seams currently ~13 m3/t. Reids-1 data indicate 7.1 – 14.6 m3/t with average 11.8 m3/t. Other Bowen Basin CSG projects have approximately 7 – 14 m3/t. • DAF values*: State Gas have raw gas rather tha
Slide 32: Basis of CSG volumetrics; 2
Basis of CSG Volumetrics; 2 • Area: • Well correlations used to establish extent of coal seams Permit boundary • Geological map overlain with 1 km2 grid • Area of Lower Aldebaran Sst outcrop assumed to mimic the maximum limit of viable CSG (P1=120 km2). Minimum area (P99=60 km2) assumed to be less t
Slide 33: Increasing hydrocarbon content from south to north
RDB Regional Gas Composition Trends: Hydrocarbon Content Trend • CO2 content generally reducing with depth: AOE-1 and Westgrove-3, 99.9% Meteor-1 which showed <3% CO2 at 3,750m • CO2 diminishing from south to north across PL-231 area • Variability most likely related to stratigraphy and geologic dom
Slide 34: RDB CSG water production
RDB CSG water production The volume and rate of CSG water production at Reids Dome is currently unknown, however: • Nyanda-4 DST#3 indicates ~100 psi over-pressure • Over-pressure means that the reservoir is closer to the desorption isotherm, and less de- watering is required to commence gas product
Slide 35: RDB Tight-gas Volumetrics
RDB Tight-gas Volumetrics 35
Slide 36: Reid's Dome Conventional Gas - Analogues
Reid’s Dome Conventional Gas –Analogues Regional Analogues: APLNG’s Merivale Gasfield and Westgrove Deep Gas Play (PL-44) • Merivale gasfield: • Regional anticline located on-trend 40 km south of PL-231 • Reid’s Dome Beds conventional sandstone below 1492 m • Merivale-2, 5, 6 & 8; DST and Production
Slide 37: PL-231; Reids Dome Deep Prospect Potential
PL-231; Reids Dome Deep Prospect Potential • AOE-1 tested gas at low rates from two sandstones in the Reids Dome Beds (RDB) • Prospective section: >2500m (450 – 3000 m+) • Continuing gas shows at TD in Nyanda-4 indicate strong likelihood of a deeper tight gas play >1200m 90% 10% Monte Carlo Assessme
Slide 38: Cattle Creek Formation Exploration Opportunity at PL-231 Reids Dome
Cattle Creek Formation Exploration Opportunity at PL-231 Reids Dome 38
Slide 39: Seismic evaluation of Cattle Creek gas at PL-231
Seismic evaluation of Cattle Creek gas at PL-231 39
Slide 40: Cattle Creek Prospectivity
Cattle Creek Prospectivity Possible Reids Domelocation NW-1 Cattle Creek Gas sand time structure map Reids Dome NW-1 Cattle Creek Gas Sand Cattle Creek Gas Sand 0 Km 1. 0 Gas Probability Map showing potential exploration target Cattle Creek Leads • Primero West-1 confirmed reprocessed seismic signat
Slide 41: Development Scenario
Development Scenario 41
Slide 42: Conceptual PL-231 appraisal and development
Conceptual PL-231 appraisal and development PHASE-1: • Reprocess WOWCO seismic survey • Nyanda-4 conventional and CSG flow test • 2 x RDB vertical appraisal CSG wells with extensive cores and multiple DST’s • Review results and conduct scoping economics PHASE-2: • RDB CSG production pilots, 6-12 ver
Slide 43: Reids Dome Time-Line
Reids Dome Time-Line 1954: gas discovered by AOE Reids Dome-1 1975-2006: 13 wells drilled to appraise Cattle Creek gas sand Jul. 2018: State Gas reviews historic data Nov 2018: drilling 2018: Large new CSG play discovered 43
Slide 44: State Gas Capital Structure
State Gas Capital Structure Shareholder Shares Held % Founders, Directors & related entities 80.8 million 60% Public 54.6 million 40% TOTAL* 135.4 million 100% *Excludes 7 million management options exercisable between $0.20 and $0.60 with vesting conditions and 2.5 million performance shares issued
Slide 45: Contacts
Contacts Silver City Rig- 25 drilling Nyanda-4 during November 2018 Lucy Snelling Greg Baynton CEO Executive Director State Gas Limited State Gas Limited m: +61 439 608 241 m: +61 414 970 566 lucy@stategas.com greg@stategas.com www.stategas.com ASX: GAS 45