In 2003 PELs 286 and 10 were relinquished due to the lack of detailed geological knowledge coupled with minimum target seam depths in excess of 1,000 metres.
In the US the rapid expansion of the seam gas industry during the 1980s was based on production from
relatively high rank coals with high gas contents, in which methane was produced by coalification or thermogenic processes. The
mindset at that time, was that in order to define a potentially commercial seam-gas field, high rank coals with thermogenic methane
were the only valid targets. Such coals are typically characterised by low permeability and require stimulation by hydraulic
fracturing (“fraccing”) or similar treatments in order to produce. Much of the coal in the Gunnedah Basin is not at optimum
maturity and furthermore during geological history some of the original thermogenic gas has escaped.
During the 1990s gas was recognised in coal seams of the Powder River Basin (PRB), USA, in a geological environment that did not fit the thermogenic model. These low maturity coals contained relatively low gas contents but their very high seam permeability allowed good gas production from more widely spaced wells and without the need for fraccing. This gas is produced by microbial action within relatively shallow seams. Generation of this biogenic gas occurred in recent geological time and may indeed be ongoing in many cases.
It was recognised by ACM’s geological advisers, Earth Resources Australia, that the low gas content-high
permeability results obtained in the Caroona area of PEL1 may be analogous to the PRB, and in 2004 the Georges Island #1 well was
drilled to test the concept. All prior drilling by ACM was as slim cored exploration wells which cannot be used for production
testing. In contrast, Georges Island #1 was drilled as a larger diameter non-cored well with production casing. This allowed
preliminary water pumping which demonstrated significant early gas breakout. Following this landmark discovery, two nearby wells
- Georges Island #2 & #3 - were drilled in 2006.
The potential for a “biogenic fairway” zone (MAP) at relatively shallow depth paralleling coal seam outcrop was recognised. Methane gas detected during pump testing by ACM of landholder water bores in the northern parts of PEL1 provided evidence for such a zone which was confirmed by the drilling of the Longlea #1 well in the northeast of PEL12, also during 2006.
Discussions between Santos representatives and Earth Resources Australia
in late 2006 led to introduction of the parties, and finally to the formalisation of a farmin agreement (FIA) in June, 2007
