Highlights

  • The Diona-1 well reached total depth of 2,479m, passing through Wallabella formation and basement.
  • Wallabella Sandstone indicates further potential from sections not fully logged by wireline.
  • Total net pay of 23m observed across identified Permian sandstone formations.

Xstate Resources (ASX:XST) is an Australian company listed on the ASX, engaged in the oil and gas sector through its Diona project in Queensland.  XST has released an update on the wireline logging results of the Diona-1 well, located in the Diona block of ATP20771 in Queensland. Wireline logs confirm three main intervals of net gas pay in Permian sandstone formations.

Due to challenging downhole conditions, the Wallabella Sandstones could not be fully logged, leaving potential upside that was indicated by LWD and mud logs.

Pay Zones and Formation Details

The Diona-1 pay zones were assessed using ERCE-Sproule’s Contingent Gas Resources cutoffs. Bandanna/Black Alley (2,287m) showed 60m gross pay and 13m net pay, with 11% average porosity. Tinowon Sandstone (2,411m) had 11m gross and 1m net pay, averaging 11% porosity. Wallabella Sandstone (2,421m) recorded 45m gross and 9m net pay, averaging 8% porosity, with additional potential indicated by LWD and mud logs. Combined, the formations total 116m gross pay and 23m net pay, averaging 10% porosity.

Drilling Completion

The Diona-1 well reached a final total depth (TD) of 2,479m, passing through the Wallabella formation and basement. Due to challenging hole conditions, drilling was concluded at this depth. Wireline logs were successfully run to the bottom of the hole, although the full suite of tools could not log the entire Wallabella formation. Casing was installed to within 2m of TD and cemented.

Next Steps

The Joint Venture will formalize the Operation Committee and finalize a plan for completion and testing. Decisions under consideration include perforating and potentially stimulating each of the three key zones independently to collect detailed data and revise resource estimates.

Managing Director Andrew Bald commented:
"These are extremely encouraging results for Diona-1. We now need to flow test each of the Permian reservoirs and we are very optimistic that we could see more upside from the unlogged Wallabella formation. Production testing will confirm flow rates from what could be a new gas discovery."

About the Diona-1 Well

The Diona-1 well focused on three hydrocarbon reservoirs: Tinowon, Showgrounds, and Wallabella. Early indications suggest the lower two formations host significant hydrocarbons. The proximity to existing infrastructure allows for a rapid potential path to market, with the Waggamba pipeline less than 100m from the well pad and a tie-in point about 1 km away.

Share Performance of XST

The company is currently trading at AUD 0.034 per share, down by 31.0% from its previous close of AUD 0.050.