Comet Ridge Updates on Mahalo 7 Horizontal Well Project in Queensland

Coal seam gas explorer and developer Comet Ridge Limited provided Friday an operational update on the progress of the Mahalo 7 horizontal surface to in-seam well project in Australia. This well was drilled during the fourth quarter of 2014 in the ATP 337P Mahalo Block in Queensland’s Bowen Basin.

The Mahalo 7 surface to in-seam horizontal well was positioned inside the existing vertical pilot wells. It was drilled past the Mahalo 3 vertical well, on a path to intersect the down dip Mahalo 6 vertical well. Mahalo 6 is currently being utilized as the production well to lift the water and gas from the Mahalo 7 horizontal well. The coal reservoir is at a depth of approximately 754 feet (230 meters) with a coal seam thickness of approximately 26 feet (8 meters).

Gas and water production from the horizontal well section in Mahalo 7 is currently reaching surface via the vertical intercept well, Mahalo 6 with the Mahalo 7 wellhead currently shut-in. The pump installed in the tubing inside Mahalo 6, just above the coal seam, was initially started at a low speed in order to commence water lifting.

Over recent weeks the pump speed has been gradually increased. While small flows of gas were observed for short durations during pumping operations on Mahalo 6, more sustained gas flows have now been observed over the past week. Comet Ridge is encouraged that gas flows are now being continuously recorded in the vertical Mahalo 6 well. The joint venture is currently investigating an option to install a flow and flare skid at the Mahalo 7 horizontal wellhead, which would enable water to continue to be produced from the down-dip Mahalo 6 vertical well, whilst gas could concurrently be produced from the Mahalo 7 horizontal well.

The Mahalo block sits approximately 149 miles (240 kilometers) west of Gladstone in central Queensland. Comet Ridge received its first independent reserves certification for the Mahalo Block, which was detailed in a release to the ASX Aug. 29, 2014.

Equity participants in ATP 337P Mahalo are Comet Ridge Mahalo Pty Ltd (40 percent), Australia Pacific LNG Pty Ltd (30 percent) and Santos QNT Pty Ltd (30 percent).


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