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Drilling highlights:
• E d g e r o i ‑ 1 c o r e h o l e
intersected 23.5m of coal
including 10m of Bohena
coal and is 50km north of
the Bibblewindi pilot area.
• Dewhu r s t-5 corehole
intersected 16.7m of
Bohena coal and is 12.1km
east-south-east of the
Bibblewindi pilot area.
• Dewhu r s t-7 corehole
intersected 21.7m of
Bohena coal and is 6.5km
south of the Bibblewindi
pilot area.
• Dewhu r s t-4 corehole
intersected 16.4m of
Bohena coal and is 8km
south of the Bibblewindi
pilot area.
• Dewhu r s t-3 corehole
intersected 16.2m of
Bohena coal and is 8.6km
east of the Bibblewindi pilot
area.Dewhurst-2 corehole
intersected 18.2m of
Bohena coal. Bibblewindi-
11c corehole intersected
20.1m of Bohena coal .
Recent news:
• ESG was recently included
in the S&P/ASX 300.
• 170 km of new 2D seismic
acquired using Envirovibe,
low impact, buggy-mounted
v i b rators. Seismic
processing is under way.
Reserves Upgrade:
• As at 30 September 2008,
certified 2P reserves have
been increased by 82% to
336 PJ (65% of which is
attributable to ESG).
Bibblewindi 12 Vertical Production Well
Spud Date: 12/12/2008
Rig Release Date:
Permit: PEL238 - ESG 65% interest & Gastar 35% interest.
Location: Latitude: 30o 39’ 57.00”S
Longitude: 149o 38’ 56.69”E
Rig: Lucas - Mitchell DRS026
Objective:
Bibblewindi 12 is the first of six vertical production wells to be drilled as part
of the Bibblewindi lateral pilot programme. The programme is aimed at
evaluating lateral well designs to optimally develop the Bohena coal seams
within the Narrabri CSG Project. This pilot, which incorporates four lateral
wells drilled perpendicular to the fracture system and intersecting the six
vertical drainage wells, is located proximal to the Bibblewindi 11C corehole
which intersected over 20m of Bohena coal. The pilot is 3.5km to the south
of the existing Bibblewindi 9-spot vertical well pilot.
Well Status/Results:
As at this report date, Bibblewindi 12 has reached a depth of 917m within the
upper Bohena coal section. Production casing has been set at this depth.
Following final cementing activities, the main Bohena coal seam target will
be drilled and under-reamed in preparation for lateral intersection.
Current Operations:
The rig is currently installing the B section of the wellhead and BOP’s in
preparation for drilling ahead to total depth.
Eastern Star Gas Limited ABN 29 094 269 780
Monthly Drilling Report - December 2008
ASX Release: 22 December 2008
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Power Station Approvals:
• ESG has received approval
on behalf of the Narrabri
Coal Seam Gas Joint
Venture (ESG 65% with
Gastar Exploration Ltd, 35%)
for development of a new
gas flowline and for
expansion of the Wilga Park
Power Station. The
approval was granted
pursuant to Part 3A of the
Environmental Planning and
Assessment Act 1979.
• Coal Seam Gas will be
delivered to the power
station through a new 32 km
long, 250 mm diameter
flowline from the joint
venture’s Bibblewindi and
Bohena gas production
pilots. The new flowline,
which will have capacity to
transport more gas than
Wilga Park will require even
when expanded to 40 MW,
will be constructed from
fibreglass pipe using
innovative over-the-trench
techniques, and will be
operational early in 2009.
Blue Hills 1 Corehole
Spud Date: 11/12/2008
Rig Release Date:
Permit: PEL238 - ESG 65% interest & Gastar 35% interest.
Location: Latitude: 30o 11’ 3.40”S
Longitude: 149o 43’ 9.71”E
Rig: McDermott Rig #27
Objective:
Blue Hills 1 is the seventh well of the 20 well exploration and appraisal
corehole drilling program. The well is located 17km north-northwest of the
township of Narrabri and will assess the extent of a thick Bohena seam
development in a trough that extends longitudinally to the northern border
of PEL238. The Blue Hills prospect contains a potential recoverable gas
volume of 280PJ.
The well is designed to evaluate the coal seam gas potential of coals seams
within both the Black Jack and the Maules Creek Formations. The primary
targets are the Hoskissons Seam and the Bohena seam.
Well Status/Results:
As at this report date, Blue Hills 1 has reached a depth of 77m with surface
casing set.
Due to continual wet weather at this site, the rig was unable to move
straight to site.
After reaching total depth and logging, two Drill Stem Tests were performed.
Current Operations:
The rig has been demobilised to the Lucas workshop for repairs and
maintenance over the Xmas/New Year break. The rig is expected back on
site on 12/1/2008.
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82% Increase 2P Gas Reserves
• On 18 November 2008 ESG
announced a further 82%
increase in the
independently certified
Proved and Probable (2P)
gas reserves of the Narrabri
coal seam gas project in
Northern NSW. As at 30
September 2008, certified
2P reserves have been
increased to 336 PJ (65% of
which is attributable to
ESG).
• Mr David Casey, Managing
Director of ESG, said: “The
increase in certified gas
reserves has been achieved
following assessment of
results from only the first
four coreholes drilled in the
Dewhurst area. Data from
those coreholes have
demonstrated that the
thick, gas saturated and
highly permeable coals
identified last year at the
Bibblewindi-11 corehole
extend laterally into the
Dewhurst area.”
• Mr Casey also advised that
“This is the first step in
certification of the
Dewhurst field gas reserves
and is a direct reflection on
the quality of the corehole
results to date. The
increment in 2P reserves is
based upon only a small
area around each corehole.
Further, progressive
increases in certified gas
reserves are expected
during the course of 2009,
as data from seismic
surveys, additional
coreholes and production
pilot wells becomes
available. Overall, ESG
remains confident that the
present 2P reserves target,
namely 1,300 PJ by the end
of 2009, will be comfortably
realised”.
Plug and Abandonment Programme
With the significant wet weather encountered at the Blue Hills 1 corehole
location, an opportunity was taken during the month to conduct routine plug
and abandonments on two coreholes drilled during the 2007 Exploration
Programme as required by the NSW DPI. During the month the following
coreholes were plugged and abandoned:
Bibblewindi 13C:- PEL238 - ESG 65% interest & Gastar 35% interest
Bibblewindi South 2C:- PEL238 - ESG 65% interest & Gastar 35% interest
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About ESG
ESG is focussed on exploration, development and production of coal seam gas.
The company’s main activity, the Narrabri Coal Seam Gas Project, is located in Petroleum Exploration Licence
238 adjacent to the township of Narrabri in New South Wales. ESG holds a 65.0% interest in the PEL 238 and is
the operator. The remaining 35% interest is held by Gastar Exploration Limited (AMEX: GST & TSX: YGA). PEL
238 covers 9,100 kms² of the Gunnedah Basin, the most lightly explored portion of the Bowen-Gunnedah-
Sydney Basin complex which presently supplies the dominant proportion of Australia’s coal seam gas
production. Production testing is underway at two locations (Bibblewindi and Bohena) and, on the basis of the
production pilots and the first four coreholes drilled in the Dewhurst area, 2P gas reserves of 336 Petajoules
and 3P gas reserves of 1,300 Petajoules were independently certified as at on 30 September 2008.
Further reserves will be generated in 2008/09 in PEL238 through the current corehole programme and the
completion of 4 multi-lateral production pilot wells at Bibblewindi, Dewhurst and Coonarah. The in-seam, or
horizontal, section of the multi-lateral wells will have a notional length of around 1 km, and will be drilled
perpendicular to the fracture system within the target coal seams to maximise connectivity resulting in many
times greater flow rates than can be achieved from vertical, fracture-stimulated wells.
Gas from the production pilots will be connected into ESG’s Wilga Park Power Station which will, be expanded
to take production test gas in addition to gas currently supplied from ESG’s Coonarah gas field. MOU’s for the
supply of gas from PEL 238 have been signed with Macquarie Generation (up to 500 PJ) and Babcock & Brown
(up to 40 PJ/a).
For further information contact:
Peter Lansom
Executive Director - Operations
Tel: 61 7 3136 1515
David Casey
Managing Director
Tel: 61 2 9251 5599
Street Address
Level 7, 51 Pitt Street,
Sydney NSW 2000
Tel: 61 2 9251 5599
Fax: 61 2 9251 2299
Postal Address
GPO Box 4526,
Sydney NSW 2001
office@easternstar.
com.au
www.easternstar.com.au
ASX:ESG