ASX-listed Empire Energy Group has commenced drilling of its highly anticipated Carpentaria-3H well in the Northern Territory’s revered Beetaloo gas Sub-basin.
Recent Northern Territory Government figures suggest the zone could potentially contain up to a staggering 500 trillion cubic of gas and the company plans to target the onshore resource through a 2000m horizontal probe.
Helming the program will be energy powerhouse and oil and gas stalwart Schlumberger, one of the world’s largest drilling contractors in terms of revenue.
Schlumberger will initially sink a vertical bore that shifts horizontally at depth to penetrate a gas-bearing shale unit. The technique has become an increasingly common and productive method of extracting a formation’s resources and is frequently used in the extraction of gas in the Beetaloo.
The company says Carpentaria-3H’s horizontal section will extend for 2000m.
Once complete, Empire plans to run a hydraulic stimulation or “fracking” program to release and extract the formation’s gas. The process entails drilling into a resource-bearing formation and injecting a high-pressure cocktail of water, sand and chemicals that create small fissures in the target zone that allow the hydrocarbons to escape to surface.
Empire used the technique to great effect on its proximal Carpentaria-2H well – a gas asset that shares the same drill pad as Carpentaria-3H.
While drilling of Carpentaria-3H has only just begun, development works at Carpentaria-2H have been simmering away over the past few months.
To clear a path for commercial gas production at Carpentaria-2H, the company has been running production test work and has racked up several milestones in the process, including the fracking of a record 21 reservoir intervals or “stages” in the well.
Staged hydraulic fracturing is regularly performed on horizontal, gas-bearing shale wells and allows companies to optimise the placement of a well’s fracture points to maximise gas production.
The number of stages depends on a well’s depth, with longer bores such as the 3000m plus Carpentaria-2H well generally hosting more intervals.
According to Empire, Carpentaria-2H has delivered a 51-day average production rate of 2.2 million standard cubic feet or “mmscf” of gas per day.
The company says Carpentaria-2H offers a low impurity composition that could support low-carbon development opportunities.
Empire Energy Group Managing Director, Alex Underwood said: Despite weak equity market conditions, we are experiencing strong macro tailwinds for our large scale, low CO2 Beetaloo gas project. Federal Resources Minister Madeleine King last week publicly predicted that gas prices are very unlikely to ever return to levels below $10 / GJ, and the ACCC continues to forecast material supply shortfalls in years ahead.
Shortfalls in domestic gas supply were recently underscored by the indefinite shutdown of the Northern Gas Pipeline due to a lack of gas flow.
The pipeline is a conduit for gas between the Northern Territory and the East Coast and underscores the importance of projects such as Empires in filling the void.
According to the company, a significant portion of its Beetaloo-sourced gas has been pledged to power supplier Origin Energy under a long-term offtake agreement, paving the way to supply Northern Territory and East Coast consumers in the short to medium term.
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