Santos Exploration Joint Venture

State Gas, in joint venture with Santos QNT Pty Ltd (State Gas 35%, Santos 65%), was announced preferred tenderer for two new exploration permits, ATP 2068 and ATP 2069. ATP 2068 was granted to the joint venturers in July 2022, while ATP 2069 is to be issued once native title processes are complete.

The two new areas are adjacent or in close proximity to both State Gas’ existing Reid’s Dome and Rolleston-West Projects. ATP 2068 effectively provides acreage connectivity between State Gas’ Reid’s Dome and the Santos interests to the east, while ATP 2069, when awarded, will provides both potential access to markets (it is bisected by two high pressure export pipelines) and connectivity to the Santos operated Arcadia Valley project to the east.
Both blocks are highly prospective for coal seam gas in the Bandanna Formation as indicated by commercial production on adjacent acreage. The blocks also contain targets for conventional gas. During the period, seismic reprocessing was completed on both tenements and exploration plans for the upcoming year are currently being approved by the joint venture operating committee.

StateGas_PLR2021-1-2 & PLR2021-1-3_Mar2022

CSG is provided to the HDNG Facility by a gathering system connected to the Company’s Rougemont 2/3 dual lateral exploration and appraisal well (“Rougemont 2/3”), located within the Rolleston West Project area (ATP 2062)
Rougemont 2/3 produces high-energy content CSG with minimal impurities (methane >92%) which is dehydrated and compressed at the HDNG Pilot Plant
VP technology sourced through State Gas’ partnership with Mine Energy Solutions, allows delivery of HDNG by truck, in a range of up to 300km from the plant
State Gas has an initial offtake agreement in place to support an ongoing hybrid engine truck trial at a local coal mine in the Southern Bowen Basin (increasing to 300GJ/day, but with opportunity to scale)
State Gas has created substantial IP in the course of engineering, designing and constructing the HDNG Pilot Plant and in conjunction with its partners, is now evaluating how this technology might be more broadly applied (including design and construction of future HDNG plants that meet customer’s specific fuel demand circumstances)
HDNG Pilot Plant cost approximately $8 million (excluding research and development costs, civil works and gas gathering system)
1.5 year pay-back period at full plant operating capacity (1.7TJ/day)
Engineering progressed on next iteration of plant design - reduce fabrication costs and improve portability