State Gas Limited (STGSF) Commences Fully Funded Exploration Program

State Gas Limited (ASX:GAS) (OTCMKTS:STGSF) is pleased to advise that it has commenced its two well exploration program for the Rolleston West Project located within ATP 2062 ("the Exploration Program").

HIGHLIGHTS:

- Exploration has commenced at Rolleston West Project located within ATP 2062;

- Two new vertical wells will be drilled, located close to Rougemont 2/3 in an area that has proven gas content and good permeability;

- Gas from new wells will be able to be immediately captured, with commercialisation of production testing gas through State Gas' high density natural gas ("HDNG") plant, reducing the Company's fugitive emission profile and generating revenues;

- Positive drilling and production testing results will support the Company's gas endowment, with accreditation to be sought for a maiden 2P reserve of 30-50PJs for the Rolleston West Project; and

- The two wells, which are expected to be completed within the next three months, are funded from the $5.5 million exploration grant provided by the QLD Government's Frontier Gas Exploration Program announced in May 2024.

Managing Director Mr Doug McAlpine said, "We are very pleased to have re-commenced field work today at the Rolleston West Project. With the continued commitment of our people, service providers and the Queensland Government, we look forward to delivering positive exploration outcomes over the course of the ten-week exploration program."

HDNG plant will be utilised to capture gas from the new wells, enhance revenue capacity

The two new vertical wells which will be drilled via the Exploration Program are located close to Rougemont 2/3 in an area that has proven gas content and good permeability. State Gas' high density natural gas ("HDNG") plant will enable it to immediately capture and commercialise production testing gas from these new wells, reducing the Company's fugitive emission profile while simultaneously enhancing its revenue generating capacity.

Successful drilling will lead to State Gas seeking maiden 2P reserve for Rolleston West Project

The Company anticipates that successful drilling and production testing results from the two new wells will enable it to seek accreditation for a maiden 2P reserve of 30-50PJs for the Rolleston West Project.

Establishing an initial 2P reserve is a critical next step in demonstrating the commercial viability of a substantial gas project at Rougemont West and supporting an application for a petroleum lease over a substantial portion of ATP 2062. A 2P reserve would also allow discussions with potential end users and pipeline infrastructure providers who can connect the Rolleston West Project to the Gladstone to Wallumbilla pipeline network.

Exploration program fully funded through Queensland Government's $5.5 million grant

As announced on 10 May 2024, the two new exploration/appraisal wells will be funded from a $5.5 million exploration grant provided by the Queensland Government's Frontier Gas Exploration Program ("the Grant"). Grant funding is provided progressively as milestones are achieved under the exploration program and the Company has matched the timing of its supplier payments with the grant milestones to ensure it is fully funded for the exploration program.

As announced in February 2025, the grant funding is provided progressively as milestones are achieved under the exploration program. The Company has strategically matched the timing of its supplier payments with the grant milestones to ensure it is fully funded for the exploration program.

Approximately 30% of the funding is released upon successful drilling of the two wells to the target depth, a further 40% upon well completion and the remainder once production testing is completed and statutory lodgement obligations associated with the drilling program are satisfied.

*To view the release, please visit:
https://abnnewswire.net/lnk/C5Z82L7K

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

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