1.2.3.2 Coal seam gas

There are currently no proposals for CSG development in the Gwydir subregion and no reserves have been booked (as of September 2014). However, some initial exploration for CSG has occurred, which has resulted in bookings of a combined recoverable contingent resource of 991 PJ. As per the Society of Petroleum Engineers’ (SPE) Resource Classification System and Definitions, contingent resources are those quantities of petroleum which have been estimated to be potentially recoverable from known accumulations, but are not currently considered to be commercially recoverable (SPE, 2000). Contingent resources may include accumulations for which there is currently no viable market, or where commercial recovery is dependent on the development of new technology, or where evaluation of the accumulation is still at an early stage (SPE, 2000). In the Gwydir subregion the Surat Basin overlies the Gunnedah-Bowen Basin and both basins have been subject to CSG exploration. So far, exploration has targeted the Early Permian Maules Creek Formation, the Late Permian Black Jack Group, the Middle Triassic Moolayember Formation and the Middle Jurassic Walloon Coal Measures, as well as the Early Cretaceous Bungil Formation (ESG, 2009a). For Gunnedah Basin, Bowen Basin, and Surat Basin stratigraphies showing the above mentioned formations see Figure 19 in companion product 1.1 for the Gwydir subregion (Welsh et al., 2014). Findings of the exploration activities are detailed below.

Current petroleum permits fully or partially in the Gwydir subregion are shown in Figure 3 and their details are summarised in Table 2. For the permits that are only partially in the subregion, only exploration within the boundary of the Gwydir subregion is presented here. Types of petroleum permits in the subregion, as shown in Figure 3, are petroleum exploration licences (PELs) (which give holders the exclusive right to prospect for petroleum on the land comprised in the licence (NSW Government, 2014)), petroleum exploration licence applications (PELAs) and petroleum special prospecting authority applications (PSPAPPs). The holder of a special prospecting authority has the exclusive right to conduct speculative geological, geophysical or geochemical surveys or scientific investigations on and in respect of the land comprised in the authority (NSW Government, 2014). To produce petroleum and construct and maintain the necessary infrastructure, a petroleum production lease (PPL) is required, which needs to be obtained via a petroleum production lease application (PPLA) (NSW Government, 2014).

Figure 3 Petroleum permits, coal seam gas exploration wells and coal bores in the Gwydir subregion

Source: NSW Department of Trade and Investment (NSW DTI, 2014b), viewed 22 August 2014

PEL = petroleum exploration licence; PELA = petroleum exploration licence application; PPL = petroleum production lease; PPLA = petroleum production lease application; PSPAPP = petroleum special prospecting authority application

Table 3 Details of petroleum permits fully or partially in the Gwydir subregion

Source: pbEncom (2014)

PEL = petroleum exploration licence; PELA = petroleum exploration licence application; PSPAPP = petroleum special prospecting authority application; NA means 'data not available'

The Walloon Coal Measures of the Surat Basin are viable CSG producers further north in southern Queensland (in the Maranoa-Balonne-Condamine subregion, see product 1.2 for the Maranoa-Balonne-Condamine subregion (Sander et al., 2014)). However, in the Gwydir subregion the formation is significantly thinner (approximately 200 m in thickness compared to 500 m thickness further north) as is the net coal (less than 2 m in the Gwydir subregion compared with more than 30 m in Queensland) (Pangaea, 2010a). Results of an exploration programme (exploration wells Toby 1-4 in Figure 3) carried out by Pangaea PEL 437 Pty Limited (Pangaea) in 2010 indicated very low net coal seam thickness (ranging from 0.6 m to 3.05 m), permeability (not quantified), and gas content (ranging from mean gas content of 0.5 m³/t to 0.8 m³/t on air dried basis) in this area (Pangaea, 2010a, 2010b, 2010c, 2010d). Depth to coal ranged from 460 to 665 m (Pangaea, 2010a, 2010b, 2010c, 2010d). Thus, the Walloon Coal Measures in the Gwydir subregion are currently not considered prospective for commercial CSG production (Pangaea, 2010a, 2010b, 2010c, 2010d).

The lignite to sub-bituminous coals of the Bungil Formation have been a CSG exploration target in the western Gwydir subregion as well as in the Moree region in the subregion centre (see Figure 3). At Moree the coal seams appear reasonably well-developed and are known to be gas-bearing (ESG, 2009a). Five to ten seams are typically present over an approximate 100 m interval with aggregate net thickness of up to approximately 10 m (ESG, 2009a). At exploration well Moree 4 (Petroleum Exploration Licence (PEL) 427, see Figure 3) the Bungil Formation was at a depth of 380 m and the coals had a net thickness of 4.3 m and were undersaturated with a mean gas content of 4.2 m³/t (dry ash free basis, 93% methane (CH₄)). Reservoir permeability was indicated as very low in drill stem tests (ESG, 2009a). At the exploration well Kurrabooma 1 (PEL 428, see Figure 3), targeting the same formation at a depth of 320 m, net coal thickness was 4.6 m and the coal was gas undersaturated with a mean gas content of 3.4 m³/t (dry ash free basis, 99% CH₄). Log scanner data indicated that the coals are not highly fractured (ESG, 2009b), implying low reservoir permeability. There have been 751 PJ of recoverable contingent resources booked in PEL 427 and 107 PJ in PEL 428 (ESG, 2011). No further development plans are known for these licence areas as of September 2014.

In the central-eastern Gwydir subregion, coals of the Moolayember Formation have been explored for their CSG potential. Results from exploration well Camurra 2 in PEL 6, located several kilometres to the south-east of the Moree 4 exploration well (see Figure 3), showed that the Bungil Formation does not occur here. The Moolayember Formation occurred at 810 m depth and the net coal thickness was 6.8 m with gas contents between 2.1 and 4.9 m³/t (dry ash free basis) (ESG, 2010a). The gas composition was not reported. At exploration well Gwydir 1 (PEL 6, see Figure 3), targeting the Moolayember Formation coals in the Moree High of the southern Bowen Basin at a depth of 311 m, a net coal thickness of 3.3 m was intersected with the thickest seam being 0.75 m thick. Gas content was given as 4.7 m³/t (dry ash free basis, no gas composition reported) (ESG, 2009c). Exploration well Milguy 1 (PEL 6, see Figure 3) intersected 8.5 m of net coal in the Moolayember Formation (at 711 m depth), the thickest seam being 1 m. The mean gas content was provided as 4.4 m³/t (dry ash free basis) (ESG, 2010b). The gas composition was not reported. All three wells indicated low reservoir permeability of the Moolayember Formation (ESG, 2009c, 2010a, 2010b). There have been 153 PJ of recoverable contingent resources booked in PEL 6 (ESG, 2011). No further development proposals are known for this licence area as of September 2014.

In the Bellata Trough region in the south of the subregion (southern part of PEL 427 and northern part of PEL 238, see Figure 3), the CSG potential of the Moolayember and the Bungil formations, as well as the Late Permian Black Jack Group and the Early Permian Maules Creek Formation have been assessed. Results from exploration well Bellata 2 (PEL 427, see Figure 3), intersecting the Moolayember Formation at 638 m depth and the Bungil Formation at less than 165 m depth, did not indicate gas volumes of commercial significance in any of the formations (Comet Ridge, 2004). Further south exploration well Edgeroi 2 (PEL 238, see Figure 3) was drilled to evaluate the CSG potential of the Early Permian Maules Creek Formation (Bohena Seam) and the Late Permian Black Jack Group (Hoskissons Coal) (ESG, 2010c). The Hoskissons Coal was encountered at a depth of 683 m and had a net thickness of 2.3 m and a gas content of 5.9 m³/t (dry ash free basis, gas composition more than 90% CH₄). Eastern Star Gas reports that the coals of the Bohena Seam, at a depth of 953 m, have a net thickness of 14.8 m and a high gas content of 14.2 m³/t (dry ash free basis). However, the composition of the gas is more than 80% CO₂ (ESG, 2010c). Drill stem tests indicated low reservoir permeability for both coal seams (ESG, 2010c).

To the west of the Bellata Trough, in PEL 470 (Leichhardt Resources’ Mooki Project area), the combined net thickness of the coals of the Black Jack Group and Maules Creek Formation was reported by Leichhardt Resources to be about 40 m (Leichhardt Resources, 2013). However, to date no exploration wells have been drilled in this area, thus no further information is available.

CSG exploration and commercialisation in the Gwydir subregion must be consistent with the CSG regulations and the CSG exclusion zones that apply in NSW. The exclusion zones prohibit new CSG exploration and development within a 2 km buffer of existing and future residential areas (NSW DPI, 2013a, 2013b). See Figure 10 in companion product 1.1 for exclusion zones in the Gwydir subregion (Welsh et al., 2014).