Budding Australian gas producer Empire Energy Group has wound up the latest round of flow-testing at its Carpentaria-2H (C-2H) gas well in the Northern Territory, pulling up a total of 323 terajoules, or 281 million standard cubic feet (mmscf), over 127 days.
The well’s impressive flow equates to a normalized rate of 2.75 terajoules (2.4 mmscf) each day per 1000m for the test period. After being shut in for five months to allow for soaking and pressure build-up, while also drilling the nearby Carpentaria-3H (C-3H), the company reopened C-2H for ongoing extended production testing.
A 927m-long horizontal section of C-2H, Empire’s first horizontal well into the Beetaloo sub-basin, was fracture-stimulated over 21 stages using a host of hydraulic fluids. The company says it has confirmed its post-soak initial production rate over 30 days (IP30), which clocked in at 3.5TJ (3.0 mmscf) a day per 1000m of horizontal section – a solid 17 per cent improvement on last year’s initial tests.
The impressive flow rates are now eliciting the attention of a growing list of potential suitors for the energy source amidst a looming gas shortage on the east coast of Australia.
Along with monitoring the well’s flow rates, Empire has been able to garner some important information from the pump tests, including examining the benefits of “soaking” in Beetaloo and understanding the flow characteristics of the Velkerri B shale host, as it steers towards a final investment decision slated for later this year.
Additionally, regular analysis of gas composition at the surface gas and water separator was completed from all 21 hydraulic stimulation stages, confirming the high calorific value of Empire’s gas reserves.
The company, which boasts the biggest holding in the giant Beetaloo Basin gas province in Australia’s Top End, believes its EP187 gas will attract a premium price over other dry-gas, methane-only, suppliers.
Empire Energy Group managing director Alex Underwood said: “We are pleased to share the continued strong gas flow rates achieved at C-2H as they provide further confidence that an economic development in EP187 may be achievable.”
Interestingly, the cumulative production from C-2H would equate to more than 1,000 terajoules for an equivalent 3km horizontal development well during the same period.
Dusting off the back of the envelope, Mr Underwood calculated that assuming a gas price of $10 per gigajoule, a hefty 50 per cent discount on the current spot price, an equivalent 3km development well could generate more than $10 million in gross revenue, before royalties, during an equivalent first 127 days of commercial production – without any further well optimization. They are tidy sums for any investor.
With flow testing complete, Empire has shut-in C-2H and earmarked the well as a future gas producer. The company is now gearing up to reopen C-3H for flow-testing at the conclusion of the scheduled soak period.
And in the meantime, it is also applying the finishing touches to a front-end engineering and design of a pilot plant after receiving the “green light” from the NT government to seek production approvals for its gas project.
Empire says the regulatory framework the government has put in place is among the most extensive and robust in Australia and will allow the safe and sustainable development of Beetaloo’s abundant natural gas resources.
Last month, the Australian government released its final consultation paper for the mandatory code of conduct (Gas Code), which seeks to secure more gas at reasonable prices for Aussie battlers facing a tough “heat or eat” decision as winter draws near.
Under the code, small gas producers will be exempt from the price cap, currently set at $12 per gigajoule, if they supply to only the domestic market – a solid win for small gas producers.
Empire has already locked in one local customer after signing a memorandum of understanding in 2021 with the NT Government-owned Power and Water Corporation for the potential sale and transportation of gas. As the company gears up to commence testing at its C-3H well, its dance card could soon be filling up.
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By Helen Barling
