State Gas awarded $5.5 million grant for exploration

State Gas Limited (ASX: $GAS) has been awarded $5.5 million of exploration grant funding through the Queensland Government's Frontier Gas Exploration Program. The grant will support the drilling and completion of two new exploration and appraisal wells at the Rolleston West coal seam gas project, accelerating the application for a petroleum lease and ongoing evaluation of a significant CSG project in the area.

Executive commentary on exploration grant funding

Qualifying for this exploration grant funding is a strong endorsement for the Rolleston West Project and the Company. It demonstrates that the Queensland Government shares State Gas' view that the area is highly prospective and capable of supporting new gas project development. State Gas' HDNG Facility will enable it to capture and commercialise production testing gas from these wells, thereby supporting the Frontier Grant Program dual objectives of increasing geological knowledge of the area and accelerating new gas supply to Queensland and the East Coast domestic gas market.

Summary of exploration grant and outlook

State Gas Limited (ASX: $GAS) has secured a $5.5 million exploration grant from the Queensland Government, which will facilitate the drilling of two new exploration and appraisal wells at the Rolleston West coal seam gas project. The successful results from this campaign will expedite the application for a petroleum lease and support the ongoing evaluation of a significant CSG project in the area. The company's unique capability to capture production testing gas instead of flaring was essential in satisfying the assessment criteria for the grant. This funding will contribute to increased utilisation of the HDNG production facility and support local coal mining operations seeking to reduce emissions through the use of HDNG in place of diesel in their mining truck fleets. State Gas' Executive Chairman, Mr Richard Cottee, highlighted the Queensland Government's foresight in stimulating investment in increased natural gas supply and continued support of innovation in the gas sector, aligning with the Federal Government's Future Gas Strategy report. The company's mission to support east coast energy markets through the efficient identification and development of new high-quality gas assets remains a key focus, with the grant furthering their ambitions in this direction.