Omega Oil and Gas has finalised a contract with Ensign Australia to drill a well described as a significant test of Queensland’s Taroom Trough tight gas play.

This well, along with other tests underway nearby, should point the way towards development of a badly-needed, major new source of gas for Eastern Australia, according to Omega interim chief executive officer Trevor Brown.

Omega’s strategy with Canyon-1H is to drill a horizontal well, which will greatly increase the overall reservoir surface area that can be tested when compared with a vertical well.

The company stands alongside operators including Shell and Elixir in conducting exploration and appraisal campaigns within the Taroom Trough, located in the southern Bowen Basin.

Ensign rig #965 (pictured at top of page) is expected to move to the Canyon-1H location in the third quarter of 2024 after being released from Shell QGC’s Tight Gas Sands (TGS) project, where similar horizontal wells are being drilled by the same crew.

The Canyon-1H well is designed to progress Omega’s Kianga Formation contingent resource (2C of 1.73 TCF and 3C of 4.50 TCF of gas and associated liquid hydrocarbons) towards reserve status.

“Omega is very pleased to have contracted a highly suitable rig for our Canyon-1H horizontal well,” Mr Brown said.

“The rig and crew are currently engaged in a horizontal well program nearby, so Omega will receive a ‘warm’ rig and crew with recent experience drilling similar wells in the same basin.”

Omega was applying modern horizontal drilling and multi-stage stimulation technology, which had been used successfully in similar settings in the US and elsewhere to unlock massive reserves and production where previous vertical wells were unable to flow at commercial rates, he said.

“The deep reservoirs of the Taroom Trough host globally significant volumes of gas and liquids,” Mr Brown said.

“They are advantageously located close to access points to the domestic and export markets and within an existing major oil and gas service sector.”

The planned horizontal well follows Omega’s successful Canyon-1 and Canyon-2 drilling campaign in 2023.

Its board made the strategic decision at that point not to case the intended production zone of the Canyon-1 well. This provided the option to re-enter the vertical well and drill a relatively lower-cost horizontal well section.

The Canyon-1H well will be the first horizontal well drilled into the highly prospective Canyon Sandstone at the base of the Kianga Formation.

Omega is finalising agreements and contracts for all associated services required to enable the drilling of Canyon-1H.

The company said the procurement of a fracture stimulation contractor and planning for the procurement of long lead items were also significantly advanced.