The project, northwest of Barcaldine in central Queensland, has been drilled and provided a swag of promising data.

It has confirmed that the Betts Creek coal sequence is isolated from other significant aquifer systems, particularly the overlying Hutton sandstone and Great Artesian Basin.

The pilot drilling has achieved a significant pressure sink in the area.

“Given the pilot is depleting the entire coal section (of water), clear potential exists to realise a much larger initial 2P reserves target in the order of 800 to 1000 petajoules,” the company announced in a statement to the ASX.

Schlumberger has been brought in to do reservoir simulation modelling to analyse the current production and pressure performance of the pilot and to optimise future development options.

Galilee is also drafting drilling rig contractors and long-lead procurement for an imminent drilling campaign and has started talks to the Queensland Government to upgrade its authority to prospect to a Potential Commercial Area, which would bring it closer to a Petroleum Lease

“The project has one of the largest contingent gas resources on the east coast with the potential to supply the eastern Australian gas markets, which AEMO forecasts will need supply from currently booked contingent resources from the early 2020’s.

The low estimate of the contingent resource is 308 PJ (1C), its best estimate (2C) of 2508 PJ and a high estimate (3C) of 5314 PJ.

The company’s primary focus is on converting these contingent resources to reserves.

“A workover rig has already been sourced and stacked on site and surface facilities design work is also well underway. This program is forecast to be well within the existing cash reserves of the company given its strong balance sheet and robust cash position ($26.1 million at 31 March 2020) and every effort will be made to further optimise the program and continue with our disciplined capital management,” the company said.