Queensland Pacific Metals powering through well drilling at Moranbah gas project
Five of seven proposed lateral wells, funded with an $80 million facility from industrial customer Dyno Nobel have now been completed
Encouraging flows from the first two wells suggest strong potential for production growth
Special Report: Queensland Pacific Metals has continued making forward strides on drilling new gas production wells through the Teviot Brook South well program in the Sunshine State.
Five of the seven Queensland Pacific Metals (ASX:QPM) proposed lateral wells have now been completed and 8800m of in seam drilling in the books within its Moranbah project in the Bowen Basin.
QPM has noted very encouraging flows coming from the first two within days of launching pumping operations and clear evidence of communication between the newly drilled laterals and existing wells.
The pair in production is set to be joined by another three before the end of October, all funded through an $80m facility with customer Dyno Nobel, part of the Incitec Pivot (ASX:IPL) group.
QPM CEO David Wrench said the company was excited at the progress achieved to date from the maiden campaign.
“The encouraging early gas flows from the first two wells and positive production growth trends we have seen to date are very pleasing,” CEO David Wrench said.
“Furthermore, we also appreciate the continued support of IPL who have funded this drilling program and agreed to an amendment to our Corporate Guarantee Facility to directly fund the fixed charges under the existing NQGP and TPS contracts and support QPM’s financial capacity over the term of the agreement.”
The drill rig is currently on location completing the lateral well extending from the M141GM vertical well.
Gas flows have been trending upwards in the wells drilled to date. Pic: QPM
Great Australian gas
Through all the honking over Australia’s nuclear future, Australia’s Labor government has continued to reaffirm gas as having a critical role in the transition to renewable energy.
The Albanese government’s gas strategy showed clear intent that gas will remain a central part of the nation’s energy and exports until beyond 2050.
And QPM likewise put its focus on gas, and through full subsidiary QPM Energy launched the Teviot Brook South program as the first new owner-drilled wells over Moranbah in a long time.
Moranbah was originally acquired to provide a cheap integrated energy source for QPM’s Townsville Energy Chemicals Hub, which remains in the background as a future producer of ethically and sustainably sourced nickel, cobalt and high purity alumina for EV batteries.
But amid a looming gas shortage on Australia’s east coast and a downturn in the global nickel market, Moranbah has shone as a standalone project, providing a critical source of energy to industry and consumers in North Queensland.
New commercial terms covering QPM’s supply contracts to the North Queensland Gas Pipeline and Townsville Power Station will bring fixed charges down by 83% from July 1 2025, in a move which will transform Moranbah into a tier-1 asset with supply costs that would be, on an FY24 basis, $30 million lower.
QPM had 121 producing wells are the end of FY2024, supplying 2.63PJ of gas in the June quarter, up over 5% QoQ.
Having hit a record 30.7TJ production rate in June, QPM is aiming to lift output to 35TJpd by the end of 2024.
This article was developed in collaboration with Queensland Pacific Metals, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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