State Gas Limited (STGSF) Rougemont hits 457,000 scf/day and CNG Project Update

State Gas Limited (ASX:GAS) (OTCMKTS:STGSF) is pleased to report that production testing gas from the Rougemont 2/3 lateral well ("Rougemont") has exceeded 457,000 scf/day. "Daily gas production is unquestionably economic at this rate, which is very encouraging given the top coals are still underwater." said Richard Cottee, Executive Chairman. The Company expects the top coals of the Bandanna coal measures to be uncovered by the end of March, based on its careful approach to drawdown - at a rate of three to four metres of water per day. It is reasonable to expect improved daily gas production once the coal seams are exposed.

In parallel, State Gas continues to evaluate the quickest method by which it can have reserves declared at Rougemont that are sufficient to underwrite the financing of an approximately 20 km pipeline to a connection on the Wallumbilla to Gladstone Pipelines, allowing Rougemont gas to be brought to market.

CNG Project Update

Delivery of the compressor for the Reid's Dome CNG Project has been delayed. The compressor was successfully unloaded at the Port of Brisbane, however as a result of delays in loading the compressor at the point of origin (Port of Houston, Texas), Australian Quarantine and Inspection Services have shipped the compressor offshore for fumigation. We are in the process of understanding when we will regain custody of the compressor, but at this point, we expect the compressor to be landed back in Brisbane by mid-May 2023. Our inability to commission the compressor will have a consequential delay to the original CNG project timetable. At this point, we expect the CNG Project to be producing gas by July 2023.

"While frustrating, given the flow rates being experienced, this should allow State Gas to relocate the CNG Project to Rougemont. This should result in considerable operating cost savings on the Project", Mr Cottee said.

On 17 March 2023, the Queensland Government approved changes to the Company's pre-existing environmental authority for PL 231, that allows State Gas to move forward with construction and commissioning activities for the CNG Project. This is an encouraging demonstration of the Queensland Government's desire to see new gas production brought on-line quickly.

Doug McAlpine
Chief Executive Officer
Phone: 0488 007 889
Email: doug@stategas.com

Richard Cottee
Executive Chairman
Phone: 0458 517 850
Email: richard@stategas.com

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