Eastern Gas has secured a drilling contract for its Venus-2H horizontal appraisal well and completed preparatory work ahead of an August 2026 drilling commencement in Queensland's Surat Basin.
- Drilling contract executed with Silver City Drilling for Venus-2H well
- Operational readiness progressed including site prep and well design
- Venus-2H to work with Venus-1 in integrated appraisal pilot
- Drilling scheduled for August with 14-day duration expected
- Windorah Project evaluation and partnering preparations ongoing
Drilling Contract and Appraisal Strategy
Eastern Gas Corporation Limited (ASX:EGA) has formalised its next step in the Surat Basin with a drilling contract signed with Silver City Drilling for the Venus-2H horizontal appraisal well. This contract, inked in May 2026, includes flexibility for a second well, contingent on the outcome of the first. Venus-2H is designed to intersect the existing Venus-1 vertical well, enabling an integrated appraisal pilot that aims to gather critical data on reservoir connectivity, pressure behaviour, and gas deliverability.
Operational Preparations and Upcoming Drilling
Throughout the June quarter, Eastern Gas advanced technical and field readiness activities. This included detailed well planning, site preparation, and coordination of drilling and completion services, alongside workover operations on Venus-1 to prepare it for its role as the production and monitoring well. Following these efforts, mobilisation of the Silver City Drilling Rig 34 was completed, setting the stage for drilling to commence in August 2026. The company anticipates drilling to take approximately 14 days, followed by completion and production testing phases.
Resource Context and Project Venus Outlook
Project Venus holds independently assessed contingent gas resources estimated at 87.7 PJ (1C), 130.3 PJ (2C), and 157.9 PJ (3C) within the Upper Juandah Coal Measures. While the appraisal program is designed to collect data that could support future commercial assessments, Eastern Gas is clear that there is no certainty the program will convert contingent resources to reserves or confirm commercial viability. The company has committed to providing market updates as key operational milestones are reached, including drilling completion and production testing results.
Windorah Project and Financial Position
Alongside Project Venus, Eastern Gas continued technical evaluation and partnering preparations for the Windorah Project in Queensland’s Cooper Basin. This asset offers longer-term optionality, with the company seeking capital-efficient pathways for future appraisal, including potential farm-outs or joint ventures. Financially, Eastern Gas reported cash reserves of AUD 3.356 million at quarter-end, with expenditure below prospectus allocations due to drilling and flow testing scheduled post-quarter. Estimated funding is sufficient for approximately 3.5 quarters at current burn rates. Payments to related parties, including directors, totalled AUD 194,000 during the quarter.
Bottom Line?
Eastern Gas is poised to deliver critical reservoir data from Project Venus starting August, but the commercial outcome remains uncertain until appraisal results emerge.
Questions in the middle?
- Will the Venus-2H appraisal confirm reservoir connectivity and commercial gas deliverability?
- What factors will influence the decision to proceed with the second well under the drilling contract?
- How will Eastern Gas progress partnering discussions for the Windorah Project amid current market conditions?