Gas is seen as one way to help Australia transition to a lower carbon future.
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The Mineral Resources Ltd (ASX: MIN) share price is edging higher in morning trade, up 1% to $52.03 per share.
Below we look at the ASX 200 mining services provider’s latest gas project update.
What update did Mineral Resources announce?
Mineral Resource’s share price is gaining after the company released a promising update on the drilling operations at its Lockyer Deep-1 conventional gas exploration well in Western Australia.
The well is situated on Exploration Permit EP368. Energy Resources Limited, a wholly owned subsidiary of Mineral Resources, is the operator and 80% owner of the EP368 Joint Venture. Norwest Energy NL (ASX: NWE) controls the other 20%.
Microcap ASX energy share, Norwest, is up 75% today on the announcement.
According to the release, the drilling results have identified “a significant gas discovery at Lockyer Deep-1”. The company said it encountered “excellent reservoir quality” at its Kingia Sandstone site along with significant gas elevations throughout the IRCM and Kingia Sandstone.
On Monday, drilling had reached a total depth of 4,274 metres. Mineral Resources said it’s identified the potential for additional gas in the High Cliff Sandstone, along with the potential for conventional oil resource in the Dongara Sandstone.
Commenting on the operations, Mineral Resources managing director Chris Ellison said:
The success at Lockyer Deep-1 exploration well is a fantastic start to our significant gas exploration program, as we seek to provide natural gas to power our own operations in conjunction with renewable energy sources such as solar and wind.
Following positive wireline logging, a production test will be completed at Lockyer Deep-1 exploration well to fully evaluate gas flow rates, the results of which will inform our appraisal strategy to define the full extent of the gas field.
Mineral Resources share price snapshot
The Mineral Resources’ share price is up 39% in 2021 compared to a year-to-date gain of 12% posted by the S&P/ASX 200 Index (ASX: XJO).
However, over the past month, the Mineral Resources share price is down 11.5%.
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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.