QLD gas wells falling short of forecasts?

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Prepare for cost blowouts in QLD’s burgeoning LNG sector. From The Australian:

DOUBTS about the ability of Queensland’s coal seams to produce enough gas to feed Gladstone’s LNG export plants are growing, with claims that many wells are not producing as expected and that more gas could be needed.

The concerns, which have been rejected by the three proponents spending $70 billion on projects to export gas through Gladstone’s Curtis Island, have now been backed up by Houston-based drilling supplier Superior Energy Services.

SES, which has turnover of more than $US4bn ($4.2bn) and employs more than 14,000 people around the globe, says its foresees growth in its eastern Australian business because poor well performance means more drilling in Queensland and South Australia.

“When we are talking to the operators in Queensland, we hear from them that the coal-seam gas (wells) that currently have been drilled are actually not meeting the production expectations,” SES head of Asia Pacific, Ruud Boendermaker, told investors in Houston last week.

“So what they have to do is to drill a lot more CSG wells in the next few years because of the commitments to the LNG trains that they are currently building in the north of Queensland.”

 

Comments

  1. Some good news. This means the decline rate is going to be high and drilling costs are going to skyrocket. This industry may well collapse because of this, combined with increasing competition from the USA.

    Sell shares now. đŸ˜¯

  2. Well, well, well, we always knew this. All the bullshit forecasts put about by the developers of these projects are finally being held up to the light.
    Before the operator can tell if a well is not producing they have to pump enormous volumes of water to lower the regional water table, and therein lies the problem.
    Plus, it is not the cost of drilling the well which is expensive, the major cost of a producing well is in connecting it (piping ) to the network.
    If I was in BG, I would be admitting I had been hoodwinked by the fast talking vendors of the gas acreage and resigning now.WW

      • They are too far in,(and the governments) any rush for the exits now will stall the projects. I’m glad it is their money not mine, but what has to be monitored is the environmental damage making a pincushion of the great artesian basin will cause. The persons on the land have the most to lose, and like I have previously stated, when they call time we should respect that. The plants can be easily dismantled and shipped to the USA. WW

    • That is just how humans work. The art today (increasingly difficult) is to recognise the mania and folly and steer your own course.WW