GAS COMPANY

QUEENSLAND GAS COMPANY LIMITED

QGC BELLEVUE #1R

WELL COMPLETION REPORT

ATP 610P – QUEENSLAND

Queensland Gas Company Limited A.C.N. 089 642 553 Level 11 307 Queen Street Queensland 4000

Date: May 2006 TABLE OF CONTENTS

WELL DATA CARD

1.0 SUMMARY 1

2.0 WELL HISTORY 2

2.1 GENERAL DATA 2 2.1.1 WELL NAME & NUMBER 2 2.1.2 PETROLEUM TENEMENT 2 2.1.3 MAP SHEET 2 2.1.4 GRID LOCATION 2 2.1.5 ELEVATIONS 2 2.1.6 LANDHOLDER 2 2.1.7 NAME OF OPERATOR 2 2.1.8 OTHER PARTICIPANTS 2 2.1.9 NEAREST TOWN 2 2.1.10 NEAREST WELL 2 2.1.11 NEAREST SEISMIC LINE 2 2.1.12 NEAREST GAS PIPELINE 2 2.1.13 DATE DRILLING COMMENCED 2 2.1.14 DATE CORING STARTED 2 2.2.15 DRILLING TIME TO TD 2 2.1.16 TOTAL DEPTH 2 2.1.17 STATUS AT RIG RELEASE 2 2.2 RIG DATA 3 2.2.1 CORED HOLE 3 2.3 DRILLING DATA 3 2.3.1 DAILY DRILLING REPORTS 3 2.3.2 HOLE SIZES & DEPTHS 3 2.3.3 CASING & CEMENTING 4 2.3.4 DRILLING MEDIUM 4 2.3.5 PLUGGING AND CEMENTING 4 2.4 REASONS FOR DRILLING 4

2.5 LOGGING AND TESTING 4 2.5.1 WELLSITE GEOLOGIST 4 2.5.2 MUDLOGGING 5 2.5.3 CORED HOLE SAMPLING 5 2.5.4 GAS DESORPTION TESTING 5 2.5.5 GAS CONTENT & COAL QUALITY 5 2.5.6 DESORBED GAS ANALYSIS 5 2.5.7 GEOLOGICAL LOGGING & FACIES ANALYSIS 5 2.5.8 COMPOSITE CORE SAMPLES 6 2.5.9 METHANE ADSORPTION ISOTHERM ANALYSIS 6 2.5.10 COAL PETROGRAPHIC ANALYSIS 6 2.5.11 VITRINITE REFLECTANCE 6 2.5.12 WIRELINE LOGS 6 2.5.13 TEMPERATURE SURVEYS 7 2.5.14 DRILL STEM TESTING 7

3.0 GEOLOGY 8

3.1 SURAT BASIN SETTING 8

3.2 STRATIGRAPHY 9

3.3 GAS SHOWS 9

4.0 REFERENCES 10

TABLE OF ATTACHMENTS

LIST OF TABLES

Table 1 Hole Sizes and Depths Table 2 Cored Hole Samples Table 3 Wireline Logs Table 4 Drill Stem Tests Table 5 Stratigraphy

LIST OF FIGURES

Figure 1 Well Summary Diagram. Figure 2 Location Map – QGC Bellevue #1R Figure 3 Stratigraphy – Surat Basin Figure 4 Stratigraphy – Walloon Subgroup

LIST OF APPENDICES

Appendix I Methane Adsorption Isotherms and Coal Petrographic Analyses Appendix II Drill Stem Test Reports Appendix III Earth Data Data Report for Gas Desorption Testing of Cores from Bellevue #1R well

LIST OF ENCLOSURES

Enclosure 1 Wireline Log Data (LAS Format) Enclosure 2 Wireline Log Prints Enclosure 3 Photo Library

WELL DATA CARD QGC BELLEVUE #1R PAGE 1 of 3 ATP 610P

WELL DETAILS Latitude 26° 43’ 52.50983” S Mitchell Drilling Contractors Location: Drilling Contractor: (MDC) Longitude 150° 17’ 08.73530” E Easting 230 008.394 GDA-94 Grid: Rig No. & Type: MDC Rig 120 Zone 56 Northing 7 040 452.464 GL 303.79m ASL Date Well Re-entered: 11:00hrs 15/11/2004 Elevation: KB All measurements from GL Date Coring Started: 20:28hrs 15/11/2004 Nearest N/A Date TD Reached: 21:15hrs 22/11/2004 Seismic Line:

Nearest Wells: QGC Bellevue 2 (950m west) Date Rig Released: - 25/11/2004

Map: Miles 1:100000 (Sheet 8944) Total Depth: Driller 560.20 Type Structure: Coal Seam Gas Core Well (m GL) Logger 559.30 Status of Well Suspended Date Logged: 22/11/2004 at Rig Release: New Hole Size: From (m) To (m) Diameter Plugs: From (m) To (m) Interval 240.2 560.2 96mm - - -

CASING & CEMENTING INTERVAL OD Shoe (m GL) Wt Grade Cpl Comments 6⅝’’ 60.5 19lbs/ft B S.T & C. Cemented to surface by MDC Surface

Cemented across approximately 30m at base of 4½“ 146.0 50.5 kg/3m HW HW Second String string by MDC

CORED INTERVALS New Cored Interval (m GL) Formation Cut (m) Recovered (m) (driller’s depths)

240.2 – 542.2 Walloon Subgroup 302.0 302.0

DRILLSTEM TEST INTERVALS DST INTERVAL UNIT/SEAM COMMENT No. (m GL) L Juandah Coal Measures/ Significant gas flow – inconclusive permeability 1 295.2 – 560.2 Coal Measures indicators 2 460.2 – 560.2 Bulwer/Condamine Inconclusive permeability indicators

WELL DATA CARD QGC BELLEVUE #1R PAGE 2 of 3 ATP 610P

STRATIGRAPHIC UNITS DRILLED Top Depth Elevation Thickness Net Coal AGE UNIT m GL m m m Previously Drilled Soil and Poorly Consolidated Sandy Post Mesozoic 303.79 49.56 - Alluvium surface

Late Jurassic Westbourne Formation 49.56 254.23 20.44 -

Late Jurassic Springbok Sandstone 70.00 233.79 115.52 1.20

Walloon Subgroup Middle Jurassic 118.27 54.48+ 8.79+ Juandah Coal Measures 185.52 Newly Drilled Walloon Subgroup Middle Jurassic 118.27 183.25 16.92 Juandah Coal Measures 185.52 Walloon Subgroup Middle Jurassic -68.98 48.78 3.47 Tangalooma Sandstone 368.77 Walloon Subgroup Middle Jurassic -113.76 75.40 9.65 Taroom Coal Measures 436.40 Walloon Subgroup Middle Jurassic -189.16 48.40+ - Durabilla Formation 511.80 Total Depth (TD) 560.20 -237.56

COAL SEAM INTERVALS PENETRATED Gross Interval Net Coal Formation Seam or Interval Name From To Thickness (m) (m GL) (m GL) (m) Previously Drilled Kogan Seam - - - - Macalister Seam 185.96 239.95 53.99 8.79 Newly Drilled Juandah Coal Measures Nangram Seam 242.61 243.20 0.59 0.59 Wambo Seam 251.90 268.74 16.84 1.27 Iona Seam 306.96 311.43 4.47 0.96 Argyle Seam 321.85 346.29 24.44 5.31 Tangalooma Sandstone 368.77 417.55 48.78 3.47 Auburn 451.80 452.38 0.58 0.58 Taroom Coal Measures Bulwer 465.99 471.82 5.83 4.00 Condamine 489.42 508.59 19.17 5.07

WELL DATA CARD QGC BELLEVUE #1R PAGE 3 of 3 ATP 610P

WIRELINE LOGS Max Recorded Run Log Interval (m GL) Temperature (°C) Previous Wireline Logs 1 Gamma/Density/Neutron/Caliper 240.0 – 0.0 29.0 2 Sonic 239.9 – 140.0 29.0 Recent Wireline Logs 1 Density/Gamma/Caliper 560.2 – 0.0 2 Resistivity 560.2 – 240.2 3 Acoustic Scanner 404.0 – 180.0 4 Neutron 560.2 – 240.2

QGC Bellevue 1/1R

113.41 - 116.41m (3.00m) 153.46 - 153.50m (0.04m) Caliper Gamma Density Resistivity 155.87 - 155.90m (0.03m) 0 mm 150 0 GAPI 150 1 g/cc 3 0.1 OHMM 1000 158.50 - 158.54m (0.04m) 0m 159.70 - 159.75m (0.05m)

164.20 - 164.45m (0.25m) n o i

164.49 - 164.53m (0.04m) t

164.53 - 164.63m (0.10m) a

164.69 - 164.80m (0.11m) m r

164.82 - 164.83m (0.01m) o F

164.99 - 165.03m (0.04m)

165.05 - 165.36m (0.32m) e n

165.47 - 165.54m (0.07m) r 165.55 - 165.66m (0.12m) u 50m o 185.96 - 185.98m (0.02m) b 186.03 - 186.10m (0.07m) t 6 5/8” @ 60.5m 186.39 - 186.47m (0.08m) s 186.88 - 186.89m (0.01m) e

186.96 - 187.01m (0.05m) W 187.25 - 187.29m (0.04m) 187.32 - 187.46m (0.15m) 70.0m 187.49 - 187.87m (0.38m) 187.90 - 187.95m (0.05m) e 188.40 - 189.16m (0.76m) n o

188.40 - 189.16m (0.76m) t

189.23 - 189.25m (0.02m) s

189.31 - 189.48m (0.17m) d

189.48 - 189.54m (0.06m) n

100m 189.56 - 189.57m (0.02m) a 189.59 - 189.72m (0.13m) S

189.74 - 189.92m (0.18m) 189.74 - 189.92m (0.18m) k 189.94 - 190.04m (0.10m) 5.20m o 190.11 - 190.37m (0.27m) b

190.46 - 190.70m (0.24m) g n

190.71 - 190.80m (0.10m) i

190.82 - 190.90m (0.08m) r

190.92 - 190.99m (0.08m) p

191.01 - 191.43m (0.43m) S 191.44 - 191.70m (0.26m) 191.71 - 191.71m (0.01m) 141.0m 141.0m HW @ 146.0m 191.80 - 192.12m (0.32m) 192.17 - 192.20m (0.35m) 150m 192.23 - 192.30m (0.07m) 192.31 - 192.38m (0.07m) 192.39 - 192.40m (0.01m) 192.42 - 192.58m (0.17m) 415 Sample # 192.64 - 192.84m (0.20m) 363 -364 192.85 - 193.19m (0.35m) 193.21 - 193.30m (0.09m) 193.31 - 193.39m (0.08m) 194.83 - 194.95m (0.12m) 228.60 - 228.65m (0.05m) Sample # 230.88 - 231.00m (0.12m) 416 365 - 372 231.55 - 231.64m (0.09m) 231.67 - 232.23m (0.56m) 232.24 - 232.38m (0.14m) 200m 232.41 - 232.44m (0.03m) 232.46 - 232.60m (0.14m) 233.35 - 233.65m (0.30m) 235.78 - 236.01m (0.23m) 3.59m Macalister 236.04 - 236.23m (0.19m)

236.46 - 236.69m (0.23m) s

236.75 - 236.90m (0.15m) e 237.07 - 237.12m (0.05m) r

237.78 - 238.33m (0.55m) u Previous 238.36 - 238.47m (0.11m) s 417 Sample # 239.17 - 239.20m (0.03m) a TD 240.00m 373 - 378 239.33 - 239.95m (0.62m) e

242.61 - 243.20m (0.59m) M Nangram l

250m a o

251.90 - 252.30m (0.40m) C 253.15 - 253.57m (0.42m) 1.27m Wambo 268.29 - 268.74m (0.45m) h a d n a u J

300m 306.96 - 307.61m (0.65m) Iona 211.12 - 311.43m (0.31m) 0.96m

321.85 - 322.54m (0.69m) s

323.32 - 323.83m (0.51m) e 324.48 - 325.11m (0.63m) r 331.90 - 332.10m (0.20m) u 334.25 - 334.70m (0.45m) s Argyle 336.21 - 337.08m (0.87m) 5.31m a 338.30 - 338.98m (0.68m) e 339.37 - 339.76m (0.39m) M

343.32 - 343.84m (0.52m) 345.92 - 346.29m (0.37m) l 350m a o C

359.7m n

368.77 - 369.38m (0.61m) o o l l a 369.38 - 370.23m (0.85m) W a e m n o 401.90 - 402.52m (0.62m) o t o l s a 400m d g 403.86 - 404.24m (0.38m) n n a a S 416.54 - 417.55m (1.01m) T

436.4m

450m 451.80 - 452.38m (0.58m)

Auburn l a s

465.99 - 466.91m (0.92m) o

466.91 - 467.90m (0.99m) e r C

467.90 - 468.66m (0.76m) 4.00m Bulwer 470.49 - 471.20m (0.71m) u s 471.20 - 471.82m (0.62m) m a o e o r M a

489.42 - 490.23m (0.81m) T 490.23 - 491.26m (1.03m) 502.50 - 503.47m (0.97m) 500m Condamine 503.47 - 503.84m (0.37m) 5.07m 504.10 - 505.01m (0.91m) 507.61 - 508.59m (0.98m) 511.8m

l a l l a i v b r a e r t u n I 550m D

TD = 560.2m

Net Coal Thickness JCM = 17.02m

QUEENSLAND GAS COMPANY Net Coal Thickness TCM = 9.65m QGC P:\Projects\ATP 610P\Technical ATP 610P\Bellevue #1R (corehole)\Well Geological\Bellevue 1R Well Summary.cdr 1.0 SUMMARY

QGC Bellevue #1R is a coal seam core well operated by Queensland Gas Company Limited (QGC). The deepening of Bellevue #1 enabled the collection of the remaining seams of the Juandah Coal Measures and the seams from the Taroom Coal Measures for gas desorption testing. Significant details of the drilling of QGC Bellevue #1R are as follows. All depths are quoted below ground level.

• Drilling was contracted to Mitchell Drilling Contractors (MDC). • Bellevue #1R was re-entered at 11:00hrs, on the 15th of November 2004, by MDC Rig #120, into the previously drilled Juandah Coal Measures at a depth of 240.0m • Coring immediately commenced reaching total depth on the 21st of November 2004, having cut 302.00m of core, with only minor core losses, and no core loss detected in coal intervals. • All significant coal intersections within the Nangram, Wambo, Iona and Argyle seams of the Juandah Coal Measures and the Auburn, Bulwer and Condamine seams of the Taroom Coal Measures were sealed in desorption canisters and underwent desorption testing to measure gas content. • The coal samples were allowed to fully desorb over a period of up to 107 days, and the coal core then tested for gas adsorption, coal quality and maturity. • Wireline logging was completed over multiple runs on the 22nd of November 2004. • Two straddle type DSTs were conducted over the L Juandah Coal Measures/Taroom Coal Measures, and a combined Bulwer/Condamine seam interval in November 2004. Both tests were successful, and indicated good coal seam permeability. • Following drill stem testing the well was left suspended awaiting possible recompletion as an observation well, and the drilling rig released on the 25th of November 20043.

1 2.0 WELL HISTORY

2.1 General Data

2.1.1 Well Name & Number QGC BELLEVUE #1R

2.1.2 Petroleum Tenement ATP 610P

2.1.3 Map Sheet Miles 1:100,000 (Sheet 8944)

2.1.4 Grid Location Latitude 26° 43’ 52.50983” S Longitude 150° 17’ 08.73530” E Easting 230 008.394 Northing 7 040 452.464

2.1.5 Elevations G.L.: 303.79m (ASL) K.B.: All measurements are to GL

2.1.6 Landholder Wayne and Toni Johnson Lot 372 RP897023 – Freehold “Bellevue” Old Cameby Road Miles, QLD, 4415

2.1.7 Name of Operator Queensland Gas Company Limited A.C.N. 089 642 553 Level 13, 100 Edward Street Brisbane, QLD, 4000

2.1.8 Other Participants Pangaea Oil & Gas Pty Limited A.C.N. 068 812 171 68 York Street Sydney NSW 2000

2.1.9 Nearest Town Miles (13km north)

2.1.10 Nearest Well QGC Bellevue #2 (950m west)

2.1.11 Nearest Seismic Line N/A

2.1.12 Nearest Gas Pipeline Peat Gas Pipeline approximately 8km west

2.1.13 Date Drilling Commenced 11:00 hours 15th of November 2004

2.1.14 Date Coring Started 20:28 hours 15th of November 2004

2.2.15 Drilling Time to TD 9 shifts (12 hour shift)

2.1.16 Total Depth Driller: 560.20m Logger: 559.30m

2.1.17 Status at Rig Release Suspended as possible future observation well

2 Authority To Prospect Granted

Petroleum Lease o Granted CSG Pilot

26 00’ 00” PipelinePeat Gas Development Authority to Prospect 610P Wandoan 10km 50km

ATP 651P

ATP 574P

ATP 632P ATP 676P ATP 610P Miles Bellevue 1R Chinchilla ATP 647P ATP 632P

PL 201 Brigalow

Condamine ATP 620P ATP 676P 27o 00’ 00” Roma to Brisbane Gas Pipeline

ATP 648P

ATP 632P Tara

ATP 621P

Jackson to Brisbane Oil Pipeline Moonie

28o 00’ 00” 150o 00’ 00” 151o 00’ 00” QUEENSLAND GAS COMPANY QGC SURAT BASIN TENEMENTS QGC ATP 610P - BELLEVUE 1R Figure 2

2.2 Rig Data

2.2.1 Cored Hole

Drilling Contractor Mitchell Drilling Contractors 23 Limestone Street DARRA QLD 4076

Core Rig Details Rig #120 Bourne 1000

2.3 Drilling Data

2.3.1 Daily Drilling Reports

MDC Daily Drilling Reports were faxed to the Queensland Gas Company (QGC) Brisbane Office. The Geological Contractor, Earth Data, provided supervision of drilling for QGC. Daily Operations Reports were compiled by the Geological Contractor during the surface and cored hole sections of the drilling, and emailed daily to QGC.

2.3.2 Hole Sizes & Depths

Table 1 - Hole Sizes and Depths From (m GL) To (m GL) Hole Diameter Previously drilled 0.00 61.00 8½” 61.00 146.38 5¾” 146.38 240.00 96 mm Currently drilled 240.00 560.20 96mm

3 2.3.3 Casing & Cementing (from original drilling)

Surface: Size (OD) 6⅝” Weight 19 lbs/ft Grade ASTM A53-B Type Coupling S.T & C. Casing Depth 60.5m GL Quantity of Cement 22sx Interval Cemented Cemented to surface

Second String Size (OD) 4 ½” Weight 50.5 kg/3m Grade HW Type Coupling HW Casing Depth 146.0m GL Quantity of Cement 246 litres Interval Cemented Base of string

2.3.4 Drilling Medium

The entire well was drilled using a light water based mud system, with the addition of mud chemicals at the discretion of the drilling contractor, to facilitate maximum core recovery. Continuous addition of formation clay to the mud system as a consequence of drilling needed to be managed throughout the drilling of the well.

2.3.5 Plugging and Cementing

No cement plugs were set at the time of rig release on 25th of November 2004, with the well left suspended waiting on possible recompletion as an observation well.

2.4 Reasons for Drilling

QGC Bellevue #1R is a coal seam core well operated by Queensland Gas Company Limited (QGC). QGC Bellevue #1 was drilled through the Macallister and Nangram seams of Jundah Coal Measures of the Walloon Subgroup.

Coals from the Macalister and Nangram seams of the Juandah Coal Measures were sampled and underwent desorption testing to measure the gas content of each major seam. The coal was also tested for quality and maturity to enable characterisation of the potential gas reservoir. Results from the Macalister and Nangram seams indicate that due to their shallow depth the seams were undersaturated.

2.5 Logging and Testing

2.5.1 Wellsite Geologist s

Andrew Farley, Daniel Thomas; Earth Data Julie Dingwall; QGC

4 2.5.2 Mudlogging

Earth Data provided geological services during the drilling of both the surface and coring phases of the well. Ditch gas was monitored and recorded constantly from the return mud flow line, while drilling from surface to total depth using a hand-held VRAE gas detector. Data was down loaded daily to a PC for display and analysis of results. Cuttings samples were not taken or examined during the cored section of the hole.

2.5.3 Cored Hole Sampling

The section from 240.2m to 542.2m was fully cored in order to select suitable coal seams for desorption tests. A total of 302.0m of core was cut and retrieved from the upper and lower Walloon Subgroup with only minor core loss.

Table 2 Cored Hole Samples Interval Recovered (Driller’s depths) Formation Cut (m) (m) (m GL) Previously cored 146.00 – 185.52 Springbok Sandstone 39.52 39.52 Walloon Subgroup 185.52 – 240.00 54.48 54.48 (Juandah Coal Measures) Newly cored 240.2 – 542.2 Walloon Subgroup 302.0 302.0

A detailed geological log of the core was compiled, including sedimentological features, to aid in determining seam correlation and the geology of individual “coal packages”. Coal core taken for desorption testing was photographed subsequent to testing and splitting. All remaining core was photographed in core trays at the wellsite.

2.5.4 Gas Desorption Testing

A total of 31 coal samples were taken from the Juandah Coal Measures, Tangalooma Sandstone and Taroom Coal Measures for desorption testing. Details on procedures are included in Appendix III, along with the original analytical report.

2.5.5 Gas Content & Coal Quality

After the conclusion of desorption testing the cores were split and one quarter was sent for residual gas testing and proximate analysis.

Original analytical reports are included in Appendix III.

2.5.6 Desorbed Gas Analysis

Samples of seam gas were taken from all desorption test samples to determine gas composition. Details on procedures are included in Appendix III, along with the original analytical report.

2.5.7 Geological Logging & Facies Analysis

5 All cores were logged initially in the field at drillsite, and sections of core not required for desorption testing placed in core trays with depth markers. Core sections required for desorption testing were logged quickly prior to placing in desorption canisters, and logged in detail subsequent to desorption testing and splitting with a diamond saw. Detailed lithological logs are included with the analytical report in Appendix III.

2.5.8 Composite Core Samples

Seven composite core samples were made to obtain a representative sample of each of the major coal intervals for methane adsorption isotherm determination. Individual coal core samples were grouped into major seam intervals and then crushed and combined to create the composite samples.

2.5.9 Methane Adsorption Isotherm Analysis

Energy Resource Consulting Pty Ltd (ERC) conducted methane adsorption analysis on the composite crushed core samples. Details on procedures are included in Appendix II, along with the original analytical report.

2.5.10 Coal Petrographic Analysis

Coal petrographic analysis was conducted by (ERC) on ever desorption canister sample interval, to investigate the variability of coal petrology within each seam interval. Details of the procedures and comprehensive results are included in Appendix I.

2.5.11 Vitrinite Reflectance

Reflectance analyses were conducted on the composite coal core samples by ERC. Details on procedures are included in Appendix I along with original analytical report.

2.5.12 Wireline Logs

Reeves Wireline Services Pty Ltd completed wireline logging using a mineral logging unit on the 22nd November 2004, after TD was reached. The top-hole section from the HW (4 ½”) casing shoe to the surface was not logged open hole. Refer to Enclosure 1 for wireline log data (LAS format), and Enclosure 2 for wireline log prints.

Table 3 Wireline Logs Interval Run Log (m GL) Previous Wireline Logs 1 Gamma/Density/Neutron/Caliper 240.0 – 0.0 2 Sonic 239.9 – 140.0 Recent Wireline Logs 1 Density/Gamma/Caliper 560.2 – 0.0 2 Resistivity 560.2 – 240.2 3 Acoustic Scanner 404.0 – 180.0 4 Neutron 560.2 – 240.2

6 2.5.13 Temperature Surveys

Borehole temperature was not recorded during logging. More reliable temperature information can be sourced from the DST maximum temperature recording.

2.5.14 Drill Stem Testing

After wireline logging was complete, the hole was suspended for a time awaiting a DST contractor, and the rig moved off site to other operations. Between 12th and the 15th of November the well was cleaned out, rolled over to water and drill stem tests conducted over the Lower Juandah Coal Measures and the Taroom Coal Measures from 295.3 to 560.2m, and a combined Bulwer and Condamine seam interval at 460.3 to 560.2m, using SIGRA. Both tests were successful, and indicated good permeability in the coal seam intervals.

Test intervals are detailed in the following table.

Table 4 Drill Stem Tests DST Interval Unit/Seam Comments No. (mGL) L Juandah Coal 1 295.3 – 560.2 Measures/ Taroom Test successful, indicating good permeability Coal Measures Bulwer\Condamine 2 460.3 – 560.2 Test successful, indicating good permeability Seam

DST #1 - After 1 min gas flowing with peak of 94% Vol on gas detector, after 2 mins the stabilised at 100% Vol CH4 and 15ppm CO. Total gas produced was approx 2.7m3

DST #2 - After 1 min gas flowing with peak of 38% LEL on gas detector, stabilized at 14%LEL after 2 minutes.

7 3.0 GEOLOGY

3.1 Surat Basin Setting

The Surat Basin is a large intracratonic basin of Mesozoic age covering approximately 300,000km2 of southeastern Queensland and northern New South Wales. The basin forms part of the larger Great Australian Basin (Green et al, 1997), and interfingers westward across the Nebine Ridge with the Eromanga Basin, and eastward across the Kumbarilla Ridge with the Clarence-Moreton Basin (Exon, 1976). Basement blocks consisting of the Central West Fold Belt and the New England Fold Belt limit the basin to the south, while in the north the basin has been eroded and unconformably overlies Triassic and Permian sediments of the .

The Surat Basin contains up to 2,500m of sedimentary rocks deposited during the Latest Triassic to Early Cretaceous periods (Figure 5). The Latest Triassic to Earliest Cretaceous succession in the basin consists of five fining-upwards sedimentary cycles dominated by fluvio-lacustrine deposits (Exon, 1976; Exon and Burger, 1981; Day et al, 1983). The lower part of each cycle typically comprises coarse-grained mature sandstone, grading up into more labile sandstone and siltstone, with mostly siltstone, mudstone and coal in the upper part. In the Cretaceous, inundation of the land through an increase in sea level led to deposition of predominantly coastal plain and shallow marine sediments in two cycles.

Structurally the Surat Basin is relatively simple (Figure 6), with the area of maximum deposition, the Mimosa Syncline, overlying the thickest Permian-Triassic rocks in the Taroom Trough of the underlying Bowen Basin (Day et al., 1983). Major faulting within the basin predominantly mirrors basinal boundary faults of the underlying Bowen Basin. There is substantial folding across the basin, which is due to compaction and draping, as well as some rejuvenation of older pre-Jurassic structures and faults. Formations outcrop along the northern erosional boundary and dip gently to the south and southwest at less than 5°.

Walloon Subgroup

The Middle Jurassic Walloon Subgroup forms part of the Injune Creek Group and is developed throughout the Surat Basin, ranging in thickness from less than 50m to greater than 700m. It comprises very-fine to medium grained, labile, argillaceous sandstone, siltstone, mudstone and coal with minor calcareous sandstone, impure limestone and ironstone (Swarbrick, 1973). In the northeast Surat Basin, the formation was raised by Jones and Patrick (1981) to Subgroup status and, in stratigraphic order, was divided into the Taroom Coal Measures, Tangalooma Sandstone and Juandah Coal Measures. Green et al. (1997) argued that this division could not be sustained across the entire basin, and, on these grounds, rejected this subdivision. Drilling by QGC appears to confirm Jones and Patrick’s subdivision, at least in the eastern Surat Basin, and their sub-divisions are retained for the Walloon Subgroup (Figure 7).

The Juandah Coal Measures generally comprises six named coal groups or seams. In descending stratigraphic order these are the Kogan, Macalister, Nangram, Wambo, Iona and Argyle Seams (Figure 7). The Macalister Seam can occur as two distinctive intervals and have been informally referred to as the Macalister Upper and Macalister Lower Seams by QGC. The Taroom Coal Measures generally comprises three coal groups or seams, informally referred to by QGC as the Auburn, Bulwer and Condamine Seams. The section of the Walloon Subgroup beneath the Taroom Coal Measures is defined by QGC (Scott et al. (2004)) as the Durabilla Formation, from exploration work by QGC.

8 LITHOSTRATIGRAPHIC UNITS - PERIOD EPOCH SURAT BASIN

Walloon Subgroup

(Modified after McKellar, 1999)

QUEENSLAND GAS COMPANY QGC STRATIGRAPHY - SURAT BASIN Figure 3 Swarbrick Jones & Patrick New Seam Name (1973) (1981) Nomenclature

SPRINGBOK SPRINGBOK SPRINGBOK SANDSTONE SANDSTONE SANDSTONE 0m Kogan

Macalister Upper Macalister Lower

Nangram

Wambo

7&8

COAL

COAL

JUANDAH

INTERVALS Iona JUANDAH

MEASURES

MEASURES

LITHOSTRATIGRAPHIC

Argyle 150m

6 WALLOON SUBGROUP WALLOON SUBGROUP

LITHO-

INTERVAL

SANDSTONE

SANDSTONE

TANGALOOMA

TANGALOOMA

STRATIGRAPHIC

WALLOON COAL MEASURES Auburn

Bulwer

5

LITHO-

COAL

INTERVAL Condamine

TAROOM

MEASURES

STRATIGRAPHIC

COAL

TAROOM

TION

MEASURES

3&4

Litho-

Intervals

DURABILLA

FORMA Stratigraphic 300m EUROMBAH EUROMBAH EUROMBAH FORMATION FORMATION FORMATION

QUEENSLAND GAS COMPANY STRATIGRAPHY - QGC WALLOON SUBGROUP Figure 4 3.2 Stratigraphy

Bellevue #1R intersected the Walloon Subgroup. The table below outlines the formations and coal seams penetrated in the well. The lithology of the formations penetrated is described in the English Geological Log included in Appendix III.

Table 5 Stratigraphy Formation Top Depth m (GL) Thickness m Net Coal m Soil and Poorly Consolidated 0.00 49.56 - Sandy Alluvium Westbourne Formation 49.56 20.44 - Springbok Sandstone 70.00 115.52 1.2 Walloon Subgroup 185.52 374.68 30.04 Juandah Coal Measures 185.52 183.25 16.92 Kogan Seam Not present Macalister Upper Seam 185.96 8.99 5.20 Macalister Lower Seam 228.60 11.35 3.59 Nangram 242.61 0.59 0.59 Wambo Seam 251.90 16.84 1.27 Iona Seam 306.96 4.47 0.96 Argyle Seam 321.85 24.44 5.31 Tangalooma Sandstone 368.77 48.78 3.47 Taroom Coal Measures 436.40 75.40 9.65 Auburn Seam 451.80 0.58 0.58 Bulwer Seam 465.99 5.83 4.00 Condamine Seam 489.42 19.17 5.07 Durabilla Formation 511.80 48.40+ - Total Depth (TD) 560.20

3.3 Gas Shows

A ditch gas detection system was maintained during the drilling of the well from the 6⅝” casing shoe, to total depth. The system comprised a total gas detector recording all combustible gas as methane equivalent, with inbuilt sample pump and data logging capability. Ditch gas sample was collected via a passive (non agitated) gas trap at the well head.

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4.0 REFERENCES

Australian Standard, 1999: AS 3980-1999, Guide to the determination of gas content of coal – Direct desorption method

DAY, R.W., WHITAKER, W.G., MURRAY, C.G., WILSON, I.H., AND GRIMES, K.G., 1983: Queensland Geology. Geological Survey of Queensland Publication, 383.

EXON, N.F., 1976: Geology of the Surat Basin, Queensland. Bureau of Mineral Resources, Geology and Geophysics, Bulletin, 166.

EXON, N.F. AND BURGER, D., 1981, Sedimentary cycles in the Surat Basin and global changes of sea level. BMR Journal of Australian Geology and Geophysics, 6, 153-159.

FIELDING, C.R., 1993: The Middle Jurassic Walloon Coal Measures in the type area, the Rosewood – Walloon Coalfield SE Queensland. Australian Coal Geology, 9 May 1993, 4-15.

GREEN, P.M., HOFFMANN, K.L., BRAIN, T.J., AND GRAY, A.R.G., 1997: Project aims and activities, exploration history and geological investigations in the Bowen and overlying Surat Basins, Queensland. In, Green, P.M. (Editor.), 1977: The Surat and Bowen Basins, south-east Queensland. Queensland Minerals and Energy Review Series, Queensland Department of Mines and Energy, 1-11.

JONES, G.D. AND PATRICK, R.B., 1981: Stratigraphy and coal exploration geology of the northeast Surat Basin. Coal Geology, Journal of the Coal Geology Group, Geological Society of Australia, 1 (4), 153-163.

MCKELLAR, J.L., 1999: Late Early to Late Jurassic palynology, biostratigraphy and palaeogeography of the Roma Shelf area, northwestern Surat Basin, Queensland, Australia. Department of Geology and Mineralogy, University of Queensland, PhD thesis, (1-3).

NELSON, CHARLES R., 2000: New Methods for Coalbed Reservoir Gas-in-Place Analysis: Results from Case Studies in the San Juan, Powder River, Black warrior and Central Appalachian Basins. Gas research Institute Report, August 2000

NGUYEN, D.L., RENISON, M. AND GURNEY, E.H., 1995: ANU Southeast Teatree CBM-1 Well Completion Report. Queensland Department of Natural Resources and Mines open file report, CR 28117

SCOTT, S., ANDERSON, B., CROSDALE P., DINGWALL J. AND LEBLANG G., 2004: Revised geology and coal seam gas characteristics of the Walloon Subgroup – Surat Basin, Queensland. In: Boult, P.J., Johns, D.R. and Lang, S.C. (Eds), Eastern Australasian Basins Symposium II, Petroleum Exploration Society of Australia, Special Publication, 1–11.

SWARBRICK, C.F.J., 1973: Stratigraphy and economic potential of the Injune Creek Group in the Surat Basin. Geological Survey of Queensland, Report 79.

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