The two core holes will evaluate the potential of the Hoskissons Coal Seam within the Late Permian Black Jack Coal Measures.
The Hoskissons coal seam, about 6 metres thick and widely distributed within the eastern part of PEL433, has the potential to contain up to 4000 petajoules (PJ) of coal seam gas.
ESG has also announced a farm-in agreement with Gastar Exploration New South Wales, whereby Gastar can earn a 35% interest in PEL433 and the adjoining PEL434, thereby aligning parties’ joint venture interests within PELs 238, 433, and 434 for CSM development in the Gunnedah Basin.
Under the terms of the deal, Gastar will pay for the costs of the core holes and the evaluation of the intersected coal reservoirs.
ESG will remain operator of PEL433 and PEL434 with a 65% interest.
PEL 433 is located south of PEL238 where ESG is developing its CSM Gunnedah Basin Gas Project targeting an independent certification of 50–100PJ of 2P (proved and probable) gas reserves in this quarter.
ESG added that it had successfully drilled and was now testing the Bohena North-1C and 12C wells, with a target of increasing gas reserves up to 200PJ.
Two of the three available wells, Bohena-3 and 9, were on production test with aggregate gas production rates increasing.
Bohena-7 was awaiting a workover to replace a damaged pump.
The company said all nine wells in the Bibblewindi production pilot program were being tested, with gas flow rates increasing as forecast.
The project remained on target for independent gas reserve certification by the end of September.
Bohena and Bibblewindi are in the Gunnedah Basin gas project in PEL238 that contains one of the largest onshore natural gas accumulations in Australia, totalling 17,000PJ of gas in place within two coal-bearing formations.
ESG operates the project with a 65% interest while Gastar holds 35%.
ESG has entered into a memorandum of understanding with the NSW Government-owned electricity generator Macquarie Generation for the possible supply of up to 500PJ of gas for use in the 2640MW Bayswater Power Station near Muswellbrook in the Hunter Valley.
