Galilee Energy Ltd

Responding to ASX Query: Galilee Energy Ltd.’s (ASX: GLL) stock surged 11.11% on July 02, 2018. The company had recently received the query from ASX to provide them additional information regarding the progress of the Glenaras Gas Project Production Pilot as per the ASX Listing Rule. GLL had earlier informed the market and the investors regarding the installation of the surface facilities and lease flowlines. The initial test conducted on Glenaras 10L and 12L have given excellent flow results with achievement of water rates of greater than 750 BWPD, along with less than 10% reservoir pressure drawdown. This result reflected that both wells have significant coal productivity which augurs well for reservoir pressure drawdown within the pilot area. The company has planned to ramp up production over the coming weeks to achieve full reservoir drawdown. ASX inquired about the location of the wells and the details of the permit/lease on which the well is located, the entity’s working interest in the wells, the geological rock type of the formation drilled, the depth of the zones tested and the choke size used, the flow rates and, if measured, the volumes of hydrocarbon phases measured. On this GLL replied that the location of the Glenaras Gas Project is within ATP 2019 in the western portion of the Galilee Basin some 50 km NNE from the township of Longreach. The Galilee Basin is located in central west Queensland, between the Bowen and Cooper Basins, some 900 km NW of Brisbane. Moreover, the permit covers 3,961 km and the resource has over 20 exploration wells, 700 km of seismic and two previous multi well pilots.

GLL is the Operator and through its wholly owned subsidiaries, GLL has a 100% working interest in ATP 2019 in which the Glenaras Gas Project is located. The company has drilled within the Betts Creek Coal sequence in the R3 seam, which is one of seven coals within the Betts Creek. Both the wells have been tested at approximately 1000mTVD. Additionally, both the wells have now been brought online and an aggregate stabilised flow from both wells of approximately 1600 BWPD was measured using an electronic magflow water meter. Choke size is not relevant for the measurement of water rates and no measurable hydrocarbons are yet being produced.

In the past three months, GLL stock has risen 92.86% as on June 29, 2018 and many positives are factored into the prevailing price rise. However, as of now, we give an “Expensive” recommendation on the stock at the current price of $ 0.450 and look for an appropriate entry opportunity.

 
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