Mineral Resources (ASX:MIN) share price falls amid gas discovery update

Mineral Resources' subsidiary's joint venture has struck more gas than previously thought.

| More on:
A miner in hardhat and high visibility clothing makes a thumbs up symbol against a blue sky.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Mineral Resources Limited (ASX: MIN) share price is falling today despite good news from its 80%-owned gas discovery.

The Lockyer Deep-1 Gas Discovery is expected to contain more gas than pre-drilling activities found previously.

The resource is 80% owned by Mineral Resources' subsidiary Energy Resources Limited and 20% owned by Norwest Energy NL (ASX: NWE). It is located in the Perth Basin.

Right now, the Mineral Resources share price is $44.39, 2.7% lower than its previous close.

Let's take a closer look at today's news of the Lockyer Deep-1 Gas Discovery.

Positive update on Lockyer Deep-1

The Mineral Resources share price is in the red amid Norwest Energy's announcement of the companies' gas discovery.

The Lockyer Deep-1, a joint venture between the companies, has been found to be more prosperous than previously thought.

Norwest Energy released an update on wireline logging operations at the discovery this morning, stating the findings upgrade the discovery's prospects.

Lockyer Deep-1's Kingia target, found within Kingia sandstone, has been found to be of higher quality than previously predicted.

Norwest stated high reservoir pressures indicate the target has a gas column of between 600 metres and 800 metres.

This means the indicative areal extent of the discovery is around 66 square kilometres. The area's estimated gas resources are now believed to be greater than the company's pre-drill prospective resources.

The reservoir is now estimated to have a net gas pay of 20.2 metres, total vertical depth. It's expected to have an average porosity of 16% and average permeability of 500 millidarcys.

The companies' petrophysical analysis of the target found a 34-metre gross pay interval at the top of the Kingia sandstone. The gross pay interval has a total vertical depth of between 3,888 metres and 3,922 metres from sea level, with no gas-to-water contact found.

According to Norwest, the finding is remarkable and confirms the fault-seal integrity of the structure's main bounding faults despite a very significant gas column.

Mineral Resources share price snapshot

Despite today's dip, the Mineral Resources share price has been performing well lately.

It is currently 16% higher than it was at the start of 2021. It has also gained 77% since this time last year.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Resources Shares

A miner holding a hard hat stands in the foreground of an open cut mine
Resources Shares

A close look at BHP shares. What is the mining giant's next move?

Let's take stock of what the experts think.

Read more »

Miner looking at a tablet.
Resources Shares

Short bets on Pilbara Minerals shares are declining. Is now the time to buy?

Could the trade be unwinding?

Read more »

two men in hard hats and high visibility jackets look together at a laptop screen that one of the men in holding at a mine site.
Resources Shares

'I hate what I have done': Mineral Resources share price down as Ellison laments actions

Managing Director Chris Ellison says he deeply regrets the impact of his 'error of judgement'.

Read more »

A man in shirt and tie uses his mobile phone under water.
Resources Shares

The Lake Resources share price is sinking yet again. Here's why

The longer-term downtrend continues.

Read more »

Miner and company person analysing results of a mining company.
Resources Shares

With a P/E ratio of 6, is the Fortescue share price a bargain?

Let’s dig into whether Fortescue shares are good value or not, in my eyes.

Read more »

A man wearing a hard hat and high visibility vest looks out over a vast plain where heavy mining equipment can be seen in the background.
Resources Shares

Down 15% this year, where's the next stop for Rio Tinto shares?

Where to next for the miner?

Read more »

Miner and company person analysing results of a mining company.
Resources Shares

Can Pilbara Minerals shares cross the $3 mark?

Lithium stocks continue to split opinion.

Read more »

Female miner smiling in front of a mining vehicle as the Pilbara Minerals share price rises
Resources Shares

'Encouraging signs' for Fortescue shares heading into 2025

This leading investment expert forecasts brighter days ahead for Fortescue shares.

Read more »