1.2.1.2.2 Coal seam gas from brown coal

The Traralgon Formation coals have been considered a possible CSG resource. The coals are thick and widely distributed, underlying most of the onshore Gippsland Basin. However, there is scant data available on coal rank and moisture content of these deeper brown coal seams, and no gas content or permeability measurements (Goldie Divko, 2015). Considering the lack of key data, there is significant uncertainty associated with the prospectivity of the Traralgon Formation coal seams as a CSG resource.

Ignite Energy Resources (IER) holds the current exploration licence for the 3800 km² EL 4416 over a portion of the onshore Gippsland Basin. IER are targeting exploration of the deeper lignite seams of the Traralgon Formation, containing biogenic natural gas (~100% methane), which it considers has been created by microbial activity within the lower-rank coal (IER, 2014). The potential resource size reported by IER (2014) is 3.7 TCF contingent resource (2C – best estimate of contingent resources); independently estimated by MHA Petroleum Consultants.

Prior to IER’s involvement, the previous tenement holder, CBM Resources Pty Ltd commenced a drilling program in 2002. The drilling program included participation in two conventional petroleum wells. In one of these wells, York-1, coals between 567 and 640 m were tested and showed indications of methane gas and permeability within the coals (Gastar Exploration Ltd, 2002).

Gastar Exploration Ltd (Joint Venture Partner with CBM Resources Pty Ltd – EL 4416 holder prior to IER), announced the drilling of the first pilot well specifically for CSG in EL 4416 in the Gippsland Basin in May 2005. The pilot well (Burong #2) was drilled to a depth of 692 m, intersecting a coal seam around 14 m thick (Gastar Exploration Ltd, 2005). A second pilot well (Burong #3) close to Burong #2 was planned, along with well completions using techniques commonly used in the Powder River Basin in the United States with open-hole completions to be stimulated with water enhancements to flush away coal fines. The same article reported the intention to put the wells on production to gauge water and gas rates. However, no further information regarding the planned wells, techniques used and water production is available.