LNC was lucky in Arckaringa but NVG is even luckier. NVG hasn't even started anything yet on their leases and "overnight" the value of their leases has gone up.
NAVGAS – ENERGY SUBSIDIARY
On 28 September 2012, Navaho Gold announced that it has formed a new energy subsidiary,
NAVGAS Pty Ltd, to hold an energy project within its overall project portfolio. The project constitutes
a shale gas play in the central part the Flinders Ranges within the Adelaide Fold Belt in South
Australia.
Navaho Gold’s technical team were aware of a reported gas flow from previous drilling in the
Blinman Diapir which indicated that the Neoproterozoic Tapley Hill Formation is prospective for
shale gas. Blinman-2 (drilled to a total depth of 2,031m) encountered gas at a depth between
1,200m and 1,600m within the Tindelpina Shale Member and equivalent vitrinite reflectance results
clearly places this unit in the gas window.
Regionally the Tapley Hill Formation in the central Flinders Ranges attains its lowest maturity and is
gas-prone making this area prospective for shale gas. The total organic carbon (TOC) profile down
Blinman-2 shows two relatively thick zones of fair source rock with values >1%. The structural
setting is permissive for possible higher TOC contents.
On this basis NavGas applied for five PELAs covering a total area of approximately 50,000 km2 to
provide regional coverage of the prospective shale gas host. The Moomba-Adelaide gas pipeline
traverses the southeast part of one of the PELAs and hence the project boasts excellent
infrastructure. Land use over the majority of the area is livestock grazing.
The board is currently undertaking a strategic review of these assets to determine the best options
for their divestment or development.
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