Strike Energy Ltd. is set to spud what it believes will be the world’s deepest pure coal-seam well and the first of its kind not only in Australia, but also the southern hemisphere.
The Adelaide-based explorer has enlisted U.S. expertise, more synonymous with a shale play in North America than an Australian coal seam structure, by enlisting oilfield services company Halliburton Co. (NYSE: HAL) for the ground-breaking effort at Jaws-1. Strike Energy also said that the Ensign 965 drill rig had begun mobilization at the Klebb Field in the Southern Cooper Basin to shift into the final countdown for the Feb. 14 spud.
Ensign 965 is one of the largest and most powerful land rigs in Australia, with a hook load of 700,000-lb and over 2,000 horsepower of hydraulic pumping capacity, and has been tasked with unlocking a gas resource of up to 11trillion cubic feet to bring critical supplies to the countries’ gas squeezed eastern states.
Strike Energy has proclaimed Jaws-1 to be one of the most technically advanced and the deepest pure coal seam gas wells ever drilled, to a depth of 6561 ft (2000 m). Strike believes wells of this magnitude have only been drilled in Colorado, U.S., and Alberta, Canada, but never as an exclusive, ‘pure coal-seam gas well’.
The appraisal well will be horizontally stimulated in seven stages over a 2624 ft (800 m) section that will intercept a second vertical well to test the gas-charged 114 ft (35 m) thick Vu upper coal seam and its effect on the productivity of the reservoir. With 114 ft to 131 ft (35 m to 40 m) of thick net pay gas targeted Jaws-1 will, if successful, deliver up to six times the gas yield of a typical coal seam well.
Strike’s Southern Cooper tenements are strategically located just 43 miles (70 km) south of the Moomba gas processing hub in central Australia and is conveniently traversed by the Moomba-Adelaide pipeline.
While coal seam gas wells in neighboring Queensland are typically 1312 ft to 1968 ft 400 m to 600 m in depth, the Weena trough of the Southern Cooper Basin features two buttresses that have alleviated compression forces over time and preserved permeability, creating a different dynamic in the Southern Cooper Basin in the state of South Australia.
Jaws-1 will be drilled as a 7-inch hole and Strike will use electronic submersible pumps downhole to dewater the reservoir and free the gas up for extraction.
The feast-to-famine gas crisis on the eastern seaboard of Australia prompted the South Australian government to offer Strike a $990,000 incentive to relocate its office from Sydney to Adelaide.
Strike Energy already has forward sales agreement to cover 10-years of supply with explosives maker Orica, cement maker Adelaide Brighton, buildings material company Brickworks and packaging giant Orora.
Subject to the desired outcome at Jaws-1 and a potential Jaws-2 drilling campaign, Strike is aiming for final investment decisions later on in this year and first gas in 2019.
The company has supply obligations to South Australia, but also options aplenty considering that the Moomba pipeline is transporting gas at 80% capacity and Gladstone’s six LNG trains on Curtis Island, which have a combined capacity of 25 million tonnes per year, are running 20% short of full output.
In the third-quarter of 2017, Strike was able to rustle up $9 million for Jaws-1 in a capital raising that was oversubscribed. The company has $8 million in the bank and access to an undrawn $5.4 million debt facility, which puts it in a sound position to pursue its South Cooper Basin Gas aspirations.