The Beach Energy Ltd (ASX: BPT) share price is lifting slightly this afternoon following a gas discovery at one of its wells. At the time of writing, the energy producer's shares are swapping hands for $1.75, up just 0.12%.
Gas discovery
Investors are eyeing the company's shares today to gauge its prospect of unlocking future gas supplies.
In today's announcement, Beach Energy advised that it has discovered gas at the Artisan 1 exploration well, located roughly 30km offshore from the Victoria Otway Basin.
The company used a diamond offshore ocean onyx rig to drill a depth of 2,205 metres. A gas column of 69.5 metres in the Upper Waarre Formation (1,921 metres of measured depth) was found, with a net gas pay of 62.9 metres.
In addition, a secondary target of the Flaxman Formation (1902.8 metres of measured depth) intersected a gas column of 20.9 metres. This included a net gas pay of 4.6 metres.
'Net pay' is a common term used in hydrocarbon mining that refers to a portion of reservoir rock that holds economically recoverable gas or oil.
Beach energy owns a 60% interest in the Artisan 1 exploration licence (VIC/P43), with OG Energy controlling the remaining 40%.
What's next?
The recent spudding marks the start of Beach Energy's offshore drilling operations. The well is being cased and suspended for now, with the company eyeing for production at a later date.
Once casing is complete, the rig will move to the Geographe field to drill two in-field wells. From there, the rig will continue onto the Thylacine field for the development of an additional four in-field wells. The first gas to be extracted from the new Geographe wells is expected sometime in FY22.
Management commentary
Beach Energy managing director and CEO Matt Kay commented:
Beginning our Otway campaign with two exploration successes is a good result for Beach.
While the Artisan discovery is at the lower end of pre-drill expectations, it is being cased as a future producer. Drilling operations have gone to plan and I want to commend the teams working on the Ocean Onyx for the successful start to the campaign.
About the Beach Energy share price
The Beach Energy share price has gained 60% since this time last year, but is down 3% for 2021. The company's shares hit a 52-week high of $2.04 in January before treading lower after the Cooper Basin business purchase.
