In addition, their 2P reserves have been increased from 59PJ to 185PJ, while 1P reserves remain unchanged at 21PJ, following an independent certification by Netherland, Sewell & Associates.
Eastern Star said the report confirmed that the joint venture was on track to meet projected commitments with both Macquarie Generation (up to 500PJ) and Babcock & Brown (up to 40 PJ per annum).
“Given recent changes to the industry standard Society of Petroleum Engineers’ Petroleum Resource Management System guidelines we are very pleased with today’s certification of 1300 petajoules of 3P gas reserves,” managing director David Casey said.
“Under the revised guidelines the 3P certification is especially significant since it represents gas reserves that are known to exist, are commercially recoverable and, importantly, for which there is a likely market within the next five years.”
The reserves upgrade increase takes into account data from production pilots within PEL 238 and the six-well core hole programme drilled in 2007.
During 2008, the company said it expects further increases in gas reserves, as additional data comes available from both the existing production pilots and ongoing exploration activity.
The 2008 program will be fully funded by the $48.32 million raised by Eastern Star last year.
It will involve expanding the current core hole drilling program to allow delineation of coal thicknesses and properties (including gas content) across PEL 238 and is a fundamental input to the reserves certification process.
In addition, the joint venture – in which Eastern Star is operator and holds a 65% interest and Gastar has 35% – plans to develop further coal seam gas production pilots.
“Multi-lateral wells, with multiple in-seam holes intersecting a common vertical well, will be trialled during this campaign to assess the potential of this technology and compare its performance against the vertical, fracture-stimulated wells that have been used in the existing production pilots,” Eastern Star said.
The Narrabri CSM project is in the PEL 238 permit, which surrounds the town of Narrabri, NSW.
Covering 9100 square kilometres, the licence area contains 17,000 PJ (17 trillion cubic feet) of gas-in-place within two major coal seams.
