Penola's Otway Basin producing positive results

EARLY indications from Beach Energy's drilling in the Otway Basin are showing positive results that could potentially reinvigorate the gas industry in the region, the company has said. 

Beach Energy managing director Reg Nelson (right), pictured with drilling supervisor Dave York in front of the Jolly-1 well, said his company has discovered conventional gas reservoirs much closer to the surface than what it was initially searching for.

Beach Energy managing director Reg Nelson (right), pictured with drilling supervisor Dave York in front of the Jolly-1 well, said his company has discovered conventional gas reservoirs much closer to the surface than what it was initially searching for.

Managing director Reg Nelson said easier to produce conventional reservoirs as well as deeper unconventional targets within both the Jolly-1 and Bungaloo-1 wells have been identified. 

"Beach was always searching for shallower gas reservoirs, as well as gas held at depth," Mr Nelson said. 

"We believed that most of the commercially viable targets, around 2000m in depth, had been developed, so this news is promising."

Mr Nelson said that conventional gas exploration was likely to be used. 

"These exciting results indicate that the Sawpit Sandstone has good reservoir quality at depths of around 3150m in Jolly-1, one of the deepest intersections in this part of the Penola Trough," he said. 

"Targeting this reservoir in the deeper parts of the Penola Trough potentially opens up a new play for conventional gas."

He opposed calls for a moratorium to allow time to present the science of gas exploration and extraction.

"The science behind gas production techniques have long been established, proven and tested," Mr Nelson said. 

"It would make no sense to retest already proven science, and question information regarding geological structures that is yet to be gathered. 

"Tens of thousands of wells, independently reviewed across many states in the United States, by the most rigorous environmental regulators, have shown that fracture stimulation has not caused any drinking water contamination. 

"All a moratorium will do is prevent us from gaining an understanding of the deeper geology of the area."

Beach will continue to analyse results from core samples that it has collected from both wells. The analysis will provide insight into the thickness and distribution of the formations of interest and inform future programs.

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