Oil and Gas News

Santos, State Gas secure QLD acreage

State Gas

State Gas, together with its joint venture (JV) partner Santos, has been awarded two new gas acreages in central QLD under the state government’s Petroleum Land Release program.

The two new gas areas, dubbed PLR2021-1-2 and PLR2021-1-1-3, are located in close proximity to State Gas’ and Santos’ existing interests.

PLR2021-1-2 (Block 2) lies adjacent to Sate Gas’ Reid’s Dome (PL231) and north of Rolleston-West Projects (ATP2062) and to the east of Santos’ 50 per cent owned Warrinilla and Warrinilla North projects.

Likewise, PLR2021-1-1-3 (Block 3) is located approximately 20km east and is situated between the Warrinilla and Warrinilla North projects as well as the Santos operated Arcadia Valley project. The latter project is currently under commercial production as of mid-May 2022.

Both new locations are highly prospective for coal seam gas in the Bandanna Formation, as well as hosting conventional targets. Neither block is constrained by domestic gas reservation, allowing the gas produced from these areas to be sold into any market.

State Gas executive chairman Richard Cottee noted the particularly fortuitous timing of the strategic acreage award.

“The high gas prices triggered by the war in Ukraine appear to be with us for the foreseeable future,” Cottee said. “The conflict has highlighted Europe’s ongoing dependence on gas in. the transition to a lower carbon future. The European imperative to reduce reliance on Russian supply, and the interlinkages of the global market, make it hard to see gas prices substantially reducing in the foreseeable future.”

Under the JV, State Gas will hold 35 per cent of the new permits with Santos being appointed operator and holding the remaining 65 per cent of permits.

The award of the areas to the Sate Gas-Santos JV results in an alignment of the partners’ ownership interests across the gas resource in most of the southern Bowen Basin, granting the opportunity for a coordinated and synergistic development of the entire region.

“It is my hope that this award will herald the beginning of a timely and rational development of this new province by both Santos and ourselves at a time when the market is crying out for such development,” Cottee said.

The new acreage represents a significant expansion of Sate Gas’ portfolio, furthering its future production and providing optionality in development and marketing.