Rig access agreement to expedite exploration: ESG

Eastern Star Gas will expedite exploration at its Narrabri Coal Seam Gas Project in....

  Eastern Star Gas will expedite exploration at its Narrabri Coal Seam Gas Project in Northern New South Wales after entering into a General Services Agreement with McDermott Drilling, securing exclusive access to a Schramm TXD Rotadrill 180 drilling rig for a minimum three-year period.According to Eastern Star, the rig is a new build with state of the art automated pipe handling equipment.Eastern Star Gas Managing Director, David Casey said the rig will primarily be used for drilling coal seam gas exploration and production wells in the area of Petroleum Exploration Licence 238, but may also be used for exploration drilling in other areas that are currently under investigation. “Dedicated access to the Schramm 180 drilling rig will allow exploration activity within PEL 238 to be expedited,” Mr Casey said. “In addition to near-term exploration drilling, the rig will be used for drilling multiple gas production wells to be brought on line progressively as customer offtakes ramp-up,” he said. Mr Casey said the General Services Agreement with McDermott Drilling will ensure Eastern Star’s drilling programs can be executed in a timely, cost-effective manner, despite the underlying east-coast shortage of equipment and manpower that has resulted from high levels of activity in the coal seam gas industry. Eastern Star Gas will undertake a substantial exploration drilling program within PEL 238 during 2008. The company said it would complete a number of additional pilot production projects, involving either fracture-stimulated vertical wells or multi-lateral wells with a view to increasing the independently verified coal seam gas reserves of the area. This will underwrite requirements for supply of gas under potential gas sales arrangements based upon established MOU’s with major electricity generators.