‘Super-Gas’ Region Boosts State Gas Share Price by 27% (ASX: GAS)

There’s been plenty going on in the energy market.

The State Gas Ltd [ASX:GAS] share price is up 27% today after an announcement. At time of writing, shares are trading at 72 cents.

State Gas is a gas explorer and developer based in Queensland. They supply gas from their fully-owned Reid’s Dome Project (Project Lease 231) which is located around 50 km southwest of Rolleston and 50km west of the Queensland Gas Pipeline.

What did State Gas announce?

The Queensland Government Petroleum Land Release has chosen State Gas as a preferred tenderer to explore a 1,414km-squared area in Queensland.

The new acreage, Block 5 (or PLR 2020-1-5), is located to the west of Rolleston, next to State Gas’ Reid’s Dome which extends around 174km squared. As you can see below, this effectively multiplies the company’s acreage by over eight times.

State Gas Acreage Queensland Map

Source: State Gas

It’s not only about size though, getting the land adjacent to Reid’s Dome is quite an advantage. In the company’s own words:

Being contiguous with PL231, the addition of Rolleston-West will create a super-gas region and enable the Company to integrate activities and undertake a unified development across both areas. Facilities and infrastructure can be shared and optimally located and economies of scale can be obtained.

The area has highly prospective targets for coal seam gas and conventional gas. And, Block 5 — like Reid’s Dome — isn’t restricted by domestic market supply conditions. The gas produced there can be sold on any market.

State Gas has also announced they are looking to raise $11.5 million through a private placement and a share purchase plan. Funds will be used to progressing both projects.

State Gas Executive Chairman Richard Cottee said: ‘This latest petroleum land release is well timed to enable State Gas to contribute meaningfully in a gas-led economic recovery.

Energy to lead recovery

There’s quite a discussion going on in Australia and globally about how the recovery from the pandemic will look like on green energy and reducing emissions.

So far for Australia, the government has earmarked $18 billion for their technology roadmap. They have flagged clean hydrogen, energy storage, low-carbon steel and aluminium, carbon capture and soil carbon as their priority low emission technologies.

Meanwhile, the debate rages on.

With plenty of ASX-listed companies beaten down by the crisis, which ones will be the ones to recover first?  Check out editor Greg Canavan’s ‘Five Bounce Back Stocks to consider before the Market Recovers’.

You can access this free report here.


Selva Freigedo

Selva Freigedo is a research analyst for The Rum Rebellion.

Born in Argentina, her passion for economic analysis started at a young age. Her father was an economist for the Argentinean governments and the family used to discuss politics and economics at the dinner table.

Argentina is a country with an unusual economic history. Growing up there gave Selva first-hand experience on different economic phenomena such as hyperinflation, devaluation and debt default.

Selva has also lived in Brazil, Spain and the USA.

Back in 2000 she was living in the US as the dot com bubble popped…
And in 2008 she was in Spain as the property market exploded and then collapsed…

She has seen first-hand what happens when bubbles burst.

Selva joined Fat Tail Investment Research’s team in 2016, as an analyst. She now writes from her vantage point in Australia, where she settled in 2015.

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