Aspiring unconventional gas producer NuEnergy Gas has begun drilling its first exploratory well at the Rengat production sharing contract tenement in Indonesia.

Rengat PSC covers 2,395km2 of the Central Sumatra Basin and lies in between prolific oil and gas concessions located in the Central Sumatra Basin in the vicinity of a major gas pipeline from Jakarta to the Chevron Duri Steam Flood project and related infrastructure.

Mobilisation of the drilling rig started in early June for well RE-CBM-01CE. The MCQ 700 fully hydraulic automated truck mounted rig is currently being used to drill to a depth of 495m.

NuEnergy said the hydraulic rig was selected as it is ideally suited to coal bed methane (CBM) operations.

It is equipped with both coring and drilling top drives, requiring less manpower on site and provides a smaller footprint including the ease of inter-well mobilisation. The hydraulic rig will be mobilised to the second well, RE-CBM-02CE, located 30km southwest of RE-CBM-01CE upon completion of drilling.

NuEnergy will core, log and conduct permeability testing on coal formations to identify and map coal continuity across the basin and to understand the reservoir characteristics for further development.

NuEnergy chief executive Dr Ian Wang expressed enthusiasm for the drilling program.

“Being the first prospect well to be drilled this year, we are extremely enthusiastic given the preliminary data results we have received thus far,” he said.

Sydney-based NuEnergy has a 100 per cent working interest in Rengat PSC and is the operator.

The company is focused on rapidly proving up CBM and shale gas resources and converting them to producing resources though small scale power generation and connection to the local gas grid.

Shares in NuEnergy were unchanged at 3 cents.