Venus the main game for Real Energy, but options abound

Real Energy Corporation Limited (ASX: RLE), an Australian east coast focused gas company with interests in the Surat and Cooper Basins, has confirmed that it will commence drilling the new Project Venus CSG well (coal seam gas) next month.

The 154 square kilometre Project Venus (Strata-X 50%/Real Energy 50% JV) is located within the Walloon CSG fairway in the Surat Basin.

The joint venture partners have agreed to merge and rename the entity as Pure Energy, which will then transition to 100% ownership of Project Venus.

An independent expert has certified, on a best estimate basis, that Project Venus has a Prospective Gas Resource of 658 billion cubic feet (694 petajoules).

As indicated below, the location of this tenement is immediately adjacent to gas infrastructure and within a proven giant gas fairway, suggesting that the Venus Project has the potential to achieve early cash flows.

Roma based contractor Silver City has been selected to drill ATP 2051P, the Project Venus JV’s first Surat Basin CSG.

The well will be drilled to a planned total depth of approximately 680 metres with casing to the top Walloon, leaving the highly gas saturated Juandah coal seams in a 6 1/8 inch open hole to total depth (TD).

Well stimulation a precursor to designing pilot well

Shortly after the Silver City drill rig is demobilised, a Wellpro coil tubing unit will be mobilised and carry out a short-term initial water influx test.

After this, about 40 levels of highly gas saturated Juandah coal seams (prognoses total of 26 metres) will be abrasive jetted.

This process is a non-frack coil tubing deployed reservoir stimulation method designed to improve water influx and ultimately gas flows from the targeted gassy coals.

To compare the before and after stimulation results, a second short-term controlled water influx test will be carried out.

The post-stimulation water influx rate and other data are needed to design the first Walloon CSG pilot well.

Production testing to continue into 2021

Venus-1 will be equipped with a downhole pump, surface facilities and water handling methods as required to carry out a controlled drawdown flow test over several months.

The Venus Pilot drilling and set up is planned to start in October and the subsequent production testing is expected to continue into early 2021.

The production testing is designed to prove initial gas breakout and increasing gas flows over the controlled drawdown period as required to model and predict future gas flow rates and potentially commercial gas flow rates.

The results of the production test will also be used to either expand the pilot or, if commercial flow rates are achieved, commence an aggressive appraisal program designed to certify sufficient reserves for the Project Venus JV to secure gas sales agreements to allow for commercial field development.

Managing Director Scott Brown pointed to the multiple opportunities that lie ahead in saying, “We are pleased to be commencing the drilling of Venus-1.

''The prospect has considerable near-term upside having 694 Pj of prospective resources and we believe with some success on this well we can deliver a meaningful contingent resource in the short term.

‘’The JV’s technical team has been hard at work assessing the field’s geology, and while it was determined that the Connor-1 re-entry was a good first prospect, Venus-1 represents a less risky and more compelling opportunity and will deliver much more upside value for not much more investment.

Silver City is expected to mobilise to site in the next few weeks and we will provide a steady stream of operational updates throughout the program, making this a very exciting time for the JV and our shareholders.”

‘’As well, we are pursuing a number of initiatives through our 100% owned Pure Hydrogen Corporation, providing a great deal of optionality across the asset base.”