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- State Gas (GAS) has won a substantial new acreage, dubbed PLR2020-1-5 (simply known as Block 5), in the latest Government Petroleum Land Release
- The new permit will increase the company’s gas acreage by more than eight times, with the potential to quadruple the company’s resource position
- Block 5 is located to the west of Rollenston in Central Queensland and north of the company’s existing PL231 asset, where it is developing the Reid’s Dome Gas Project
- Additionally, State Gas is aiming to raise up to $11.5 million through a private placement and share purchase plan
- Company shares are up 36.8 per cent on the market today and shares are trading for 78 cents per share
State Gas (GAS) has won a substantial new acreage, dubbed PLR2020-1-5 (simply known as Block 5), in the latest Government Petroleum Land Release.
The new permit will increase the company’s gas acreage more than eightfold, with the potential to quadruple the company’s resource position.
Block 5 is located to the west of Rollenston in Central Queensland and north of the company’s existing PL231 asset, where it is developing the Reid’s Dome Gas Project.
The new area contains highly prospective targets for both coal seam gas (CSG) and conventional gas. It is also not restricted by domestic and gas reservation requirements.
Gas from Block 5 and Reid’s Dome will be exported through a single pipeline, which is currently being planned by State Gas.
Executive Chairman, Richard Cottee, said Block 5 was a “companymaker” for State Gas.
“The new acreage has the potential to quadruple the company’s resource position, and the increase in scale will enable efficiencies and optionality in operations,
management and marketing,” he said.
“The gas we produce can be sold to any market. Nothing beats optionality in times of uncertainty,” he added.
The company has already received an expression of interest from potential customers, with two major industrial gas consumers supporting the company’s bid for the area.
“The news of the award of Block 5 follows a new record flow rate to the south at Reid’s Dome from the Nyanda-4 well during the past weekend, approaching 500 million standard cubic feet per day (mscf/day) after just over eight weeks of de-watering,” Richard added.
State Gas will now proceed to carry out initial works to obtain the environmental and other approvals relevant to the area.
Equity raising
State Gas has also announced a private placement with sophisticated and energy sector investors, including Trevor St Baker and other experienced energy and technology investors.
The placement is aiming to raise $9.5 million at $0.55 per share.
Additionally, the company is aiming to raise a further $2 million through a share purchase plan to allow eligible shareholders to participate alongside the private placement.
Funds raised will progress both the Reid’s Dome Gas Project and the recently purchased project.
State Gas is up 36.8 per cent on the market today and shares are trading for 78 cents per share at 12:11 pm AEST.
