In baseball parlance, it took just one pitch for Strike Energy to hit a homer. The Adelaide-based junior has not only drilled the deepest pure coal seam gas well in the world, but also the deepest horizontal vertical intercept in Australian history.
Fortune favors the bold, and in this instance Strike Energy’s managing director, Stuart Nicholls, showed a conviction for deploying U.S. shale technology backed with Halliburton expertise. The move has spiked the company’s share price nearly 88% since the groundbreaking 2,000-m (6,561-ft) deep Jaws-1 well was declared a resounding success.
“Let’s just say I’m proud of the team, which deployed the best U.S. technology to achieve a first in Australia,” Nicholls told Hart Energy in an interview. “It’s a really exciting place to be, and I think the Australian onshore industry has been pretty poor in the past evolving technologies from the onshore industry in the U.S. and Canada into our environment. That was possibly driven by the coal seam-to-LNG industry, a very low-tech upstream solution, chosen as the development pathway.”
Nicholls derived great satisfaction from Strike’s game-changing event occurring in the Cooper Basin—Australia’s oldest oil- and gas-producing basin that dates back to the 1950s—where, “there has been an apprehension among onshore operators to throw the technological kitchen sink at some of their problems.
“I think this is a really good lesson for some of the big boys in the east coast onshore basins that you don’t have to push the boat too far out to find a completely new horizon,” he continued. “We haven’t deployed any world first technology. We have deployed technology that is off-the-shelf from the United States, which has delivered on a daily basis over there.”
The well was horizontally stimulated in seven stages over 800 m (2,624 ft) with an intercept to the second vertical well designed to test the gas-charged, 35-m (114-ft) Vu upper-coal seam for a coveted net pay six times greater than a typical Queensland coal seam well. The well is located just 70 km (43 miles) south of the Moomba gas processing hub in central Australia, and the Moomba-Adelaide gas pipeline runs through the block.
The company has forward sales agreements to cover 10 years of supply and with production testing imminent, Nicholls says Strike is anticipating an “ultimate recovery from Jaws-1 in the 6-9 PJ range”.
Nicholls said he “read the tea leaves” in a unique geological formation.
“The old adage of most drilling engineers in the Cooper Basin is that coals are a drilling hazard. However, the neat deposition that we have in the Southern Cooper, where the coal sits in a structural setting called the Weena trough, means we are in a low-stress environment and the coal is quite conducive to landing a horizontal in, our just underneath it, as we did,” he said.
“I said to myself, if it works over in the United States why wouldn’t it work here? Why do you have to treat this like a Queensland coal seam gas project, why can’t you treat this like a USA shale project, given a lot of the troubles of drilling horizontally through coal have been alleviated through the development of horizontal drilling technology,” he continued.
Two fractures were initiated inside the coal seam and five just below and then up into the coal seam and Nicholls said Jaws-1 had to be executed with a “high level of reliability because workovers cost a lot and more so to remote parts of the basin.”
Following depressurization and desorption of the reservoir, Strike plans to book a maiden reserve for the Southern Cooper Basin Gas Project to underpin a 50 TJ a day, phase 1 development with continued drilling to support planned processing infrastructure.
Ultimately, Strike believes it could be on the cusp of proving commercial quantities of over 10Tcf of gas from its Southern Cooper Basin Gas Project.
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