State Gas Ltd. (SGL), Brisbane, has made its entry onto the Australian Stock Exchange (ASX) with an initial public offering heavily oversubscribed this month. Triangle Energy (Global) Ltd., Perth, has taken a major holding of 35%.
The public offer closed early after raising $5.25 million (Aus.) at an offer price of 20¢/share. Based on that calculation, the company will have a market capitalization of $26.9 million (Aus.).
SGL is the first Australian east coast gas developer to list on the ASX in more than 10 years.
The company is operator and holds a 60% interest in the Reids Dome-Cattle Creek conventional gas project in permit PL 231 in the Bowen basin of central Queensland about 30 km southwest of Rolleston.
A substantial gas resource at Reids Dome was initially discovered in the 1950s, but was put aside undeveloped and largely forgotten because of its relative isolation and the lack of gas markets.
In the last few years, however, the position has radically changed with eastern Australia heading for a domestic gas shortage. Infrastructure also has caught up, with the major Queensland Gas Pipeline (QGP) about 50 km away.
SGL’s primary focus is the shallow, conventional gas target in the Cattle Creek formation, which in places is only 130 m below the surface. A number of historic wells have flowed gas from this reservoir and the company intends to drill a suite of appraisal and development wells during the next 12 months.
A secondary target is the underlying Reid’s Dome beds that are expected to be at least 2,700 m thick. This reservoir has not been fully tested and will provide a future exploration target.
To accelerate options for bringing the PL 231 gas to market SGL has applied for a pipeline survey licence and intends to investigate suitable routes for a feeder pipeline to connect with the main QGP and tap into the east coast market.
