ABN 11 064 957 419 PESA Symposium 2010 Galilee Basin CSG - - PDF document

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ABN 11 064 957 419 PESA Symposium 2010 Galilee Basin CSG - - PDF document

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ASX ANNOUNCEMENT 9 SEPTEMBER 2010 GALILEE ENERGY LIMITED PESA PRESENTATION The enclosed presentation on ATP 529P was delivered at the PESA Symposium 2010 by Andrew Parker, Principal Geologist, AGL Energy Limited. For further information

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ASX ANNOUNCEMENT 9 SEPTEMBER 2010

Level 2 / 895 Ann Street / Fortitude Valley Q 4006 PO Box 2145 / Fortitude Valley BC Q 4006 T +61 7 3216 1155 / F +61 7 3216 1199 E admin@galilee-energy.com.au

Page 1 www.galilee-energy.com.au

ABN 11 064 957 419

ASX CODE:GLL

GALILEE ENERGY LIMITED PESA PRESENTATION

The enclosed presentation on ATP 529P was delivered at the PESA Symposium 2010 by Andrew Parker, Principal Geologist, AGL Energy Limited. For further information contact: Sam Aarons Manager, Business Development & Corporate Relations Tel: 07 3216 1155 Email: info@galilee-energy.com.au

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PESA Symposium 2010 Galilee Basin CSG Exploration

6th September 2010 Andrew Parker – Principal Geologist PESA Symposium 2010

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2

Galilee Basin Location

  • Galilee Basin is located between

the Bowen, Cooper and Georgina Basins

  • Uncomformably overlain by the

Eromanga Basin for most part

  • Minimal existing infrastructure

»Galilee CSG Exploration »PESA Symposium 2010

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3

Previous CSG Exploration

  • During the early 1990’s Enron as holders of ATP529P drilled several

coreholes with the best results located at Rodney Creek and Crossmore

  • 40% to 50% saturation with pipeline quality gas composition
  • Thick coal intervals up to 35m net with good to moderate perm,

5mD to >100mD

  • Enron followed up the corehole program with single production wells at

Rodney Creek and Crossmore

  • ATP529 purchased by Galilee Energy in 2000 and a further 4 production

wells were drilled at Rodney Creek and production tested producing large volumes of water with minimal gas

  • Rodney Creek 8 corehole drilled by Galilee Energy in a more crestal

position on the Glenaras Anticline and completed desorption testing

  • ver entire stratigraphic coal interval
  • Gas contents higher than past results
  • Saturation between 50% and 70%
  • Confirmed good to moderate permeability

»Galilee CSG Exploration »PESA Symposium 2010

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Previous Exploration

»Galilee CSG Exploration »PESA Symposium 2010

  • Rodney Creek 8 gas

contents much higher than previously found

  • Difference from

Previous Rodney Creek wells thought to be due to testing methodology on

  • lder wells
  • Quick crush
  • Discreet sampling
  • Ambient

temperature desorption

0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00 800 900 1000 1100 1200 1300 1400 1500 Gas Content (m3/t) Depth (m)

Gas Content DAF Vs Depth

RC08 RC01 RC02 CM01 FL01 AF01 SC01

Rodney Creek 8

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5

AGL Farm In

  • In July 2008 AGL entered into a Farm In agreement with Galilee

Energy for 50% of ATP529P

  • The Farm In is in two stages
  • Stage 1:
  • Drill and complete a production pilot
  • Construct water holding facilities and production test wells
  • Stage 2
  • Drill 7 coreholes
  • Acquire 500km 2D seismic
  • Reprocess 2000km 2D seismic

»Galilee CSG Exploration »PESA Symposium 2010

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AGL/Galilee Energy Exploration Program

  • Stage 1:
  • Production pilot drilled and completed – 2 under-ream and 3

fraced wells

  • 380 ML produced water holding pond constructed
  • Wells placed on pump, though currently shut in due to pump

issues

  • New pumps to be installed over the next month
  • Stage 2
  • 5 coreholes drilled, 6th currently coring, 7th top hole

completed

  • Acquired 541km 2D seismic
  • Reprocessed 2231km 2D seismic, mainly 1981 to 1985 data

»Galilee CSG Exploration »PESA Symposium 2010

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7

Well and Seismic Locations

  • Exploration program

designed to appraise all ATP529P

  • Corehole program has

targeted several different types of play

  • Glenaras step out wells

to assist in field delineation

  • Thick preserved Triassic

cover for higher gas saturations

  • Thick Permian coal

bearing packages identified from seismic

»Galilee CSG Exploration »PESA Symposium 2010

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Galilee Gold Rush

  • At time of AGL Farm In

minimal exploration was underway

  • Majority of basin was not

covered by tenure

  • Acreage release by QLD DME in

August 2008 combined with AGL Farm In renewed exploration interest

  • Currently most of basin

covered by tenure

  • CSG well density has tripled

from 13 to 38 wells1 and increasing

»Galilee CSG Exploration »PESA Symposium 2010

1:GP Info 2008 and August 2010

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Recent Acreage and Drilling

»Galilee CSG Exploration »PESA Symposium 2010

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AGL/Galilee Energy Results

»Galilee CSG Exploration »PESA Symposium 2010

  • Crossmore South and Vera

Park 1 identified similar coal packages and gas contents as Rodney Creek 8

  • Acacia 1 and Mt Myth 1 were

drilled in areas where thick Triassic cover was preserved

  • Initial gas content results

suggest values lower than Glenaras and Rodney Creek, decreasing towards the north- east

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11

AGL/Galilee Energy Results

»Galilee CSG Exploration »PESA Symposium 2010

  • Wells targeting thick coal

package yielded positive results

  • Laugharne Creek 1 targeted a

thick Permian section approximately 180ms thick compared to an average of 100ms at Glenaras

  • Multiple clean seams

encountered over a 340m interval

  • Aramac Coal Measures much

thicker than previously encountered

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Glenaras Step Out

»Galilee CSG Exploration »PESA Symposium 2010

Gamma, Density Note: Section flattened to top of Permian Crossmore South 1 Vera Park 1 Rodney Creek 8

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Thick Triassic Cover

»Galilee CSG Exploration »PESA Symposium 2010

Cadna-Owie Top (Purple) Hutton Sandstone Base (Pink) R1 Coal Seam (Blue) Acacia 1 Mt Myth 1

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Thickened Permian Section

»Galilee CSG Exploration »PESA Symposium 2010

Cadna- Owie Top (Purple) Hutton Sandstone Base (Pink) R1 Coal Seam (Blue) Expanded Permian Section Laugharne Creek1

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Gas Content Trends

  • Gas content for the Galilee Basin is generally low
  • Previous results range from <1m3/t at Splitters Creek up to >7m3/t

at Rodney Creek 8 giving saturations of 52% to 67% at Rodney Creek 8

  • Rodney Creek 8 has the highest gas contents and saturations

identified to date

  • Results by depth show no particular trend, however when viewed by

area a trend is apparent

»Galilee CSG Exploration »PESA Symposium 2010

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Gas Content vs Depth

»Galilee CSG Exploration »PESA Symposium 2010

0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00 800 900 1000 1100 1200 1300 1400 1500 Gas Content (m3/t) Depth (m)

Gas Content DAF Vs Depth

RC08 RC01 RC02 CM01 FL01 AF01 SC01

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0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00 800 900 1000 1100 1200 1300 1400 1500 Gas Content (m3/t) Depth (m)

Gas Content DAF Vs Depth

RC08 RC01 RC02 CM01 FL01 AF01 SC01

Gas Content vs Depth – By Location

»Galilee CSG Exploration »PESA Symposium 2010

Eastern Side of Koburra Trough Western Side of Koburra Trough (ATP529P)

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Gas Content Variation

  • Possible causes in variation…
  • Gas stripped from coal due to meteroic water flushing of seams?
  • Higher heatflow associated with granite emplacement in the

Maneroo Platform locally raising temperature increasing gas generation?

  • However..
  • Gas composition and limited isotope values show thermogenically

derived gas on the western side of the Koburra Trough, no biogenic addition

  • No gas composition, isotope data or coals seam water is open file or

exists for eastern wells to confirm water flushing or gas source

»Galilee CSG Exploration »PESA Symposium 2010

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Shale Gas Observations

  • The Toolebuc Fm is found throughout the Eromanga Basin with

ATP529P being no exception

  • All wells drilled to date have encountered the Toolebuc Fm except
  • ne
  • Glenaras 4 drilled in late 2008 transitioned from Allaru Mudstone

into Wallumbilla Fm, Toolebuc Fm absence initially thought to be due to small scale local faulting

  • The Sardine seismic survey acquired in late 2009 provided good

definition of the Toolebuc Fm across ATP529P

  • Apparent frequent faulting throughout the Toolebuc and Wallumbilla

formations was observed on all lines with minimal structure seen to propagate through the Cadna-Owie Fm

»Galilee CSG Exploration »PESA Symposium 2010

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Sardine 09 – Line 7 and Glenaras 4

»Galilee CSG Exploration »PESA Symposium 2010

Wallumbilla Top (Red) Cadna-Owie Top (Purple) Hutton Sandstone Base (Pink) Gamma, Calliper, Density, Sonic Toolebuc not encountered

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Shale Gas Observations

  • Initially thought to be an issue with the acquisition or processing of

the seismic, till the absence of the Toolebuc Fm in Glenaras 4 was applied

  • While faulting of this nature would not be a reason shale gas

production may not succeed, any development would require dense seismic imaging, most likely 3D, to accurately map out all structure

  • Toolebuc Fm has a gross average thickness of 15m within ATP529

further reducing its attractiveness as an exploration target

»Galilee CSG Exploration »PESA Symposium 2010

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22

So what does this mean for ATP529P

  • Historical testing appears to have underestimated gas contents
  • Gas thermogenically generated
  • Southern portion of permit is more prospective than northern

portion

  • AGL and Galilee Energy are encouraged with results to date
  • Further work based on final DAF gas contents and additional

saturation values would assist in better defining trends

  • The addition of more eastern and central Koburra Trough Wells

would make a more robust interpretation

  • Shale gas potential in Toolebuc Fm appears limited due to faulting

and thin formation

»Galilee CSG Exploration »PESA Symposium 2010