Qld Gas aims to double proven reserves -

Coal seam gas specialist Queensland Gas Company (QGC) plans to ramp up development at its Berwyndale South Gasfield in a bid to double its proven and probable reserves.
The company unveiled a $59.7 million, share-based rights issue to help fund QGC's plans to expand the gas field's infrastructure and double proven and probable (2P) reserves to 1,000 peta joules (pj) through targeted drilling.
"If our program of accelerated growth strategy works, we will have, within three hours of Brisbane, 2P reserves equal to or better than the remaining Cooper Basin, all within a 25km radius of Berwyndale South, of which QGC's share will be 1,000 pj," managing director Richard Cottee said.
Sentiant Gas Australia Pty Ltd holds the remaining 10 per cent ownership in the Berwyndale South Gasfield.
The Cooper Basin is one of Australia's biggest gas fields, straddling the borders of South Australia and south-west Queensland.
QGC is aiming to at least double the gas it sells from 29 pj to between 60 pj and 70 pj, as the rising costs of coal and other energy prompt power utilities and other customers to search for cheaper sources of fuel.
The accelerated drilling project "should place QGC in a position within 12 months to provide for the significant potential increase in demand for natural gas in south-east Queensland and New South Wales," Mr Cottee said.
QGC currently has certified reserves of over 2.4 trillion cubic feet, with 147 pj in proved reserves and over 400 in proven and probable reserves.
"The target finding cost of new reserves is only 3 cents per gigajoule (gj), compared with the acquisition costs of gas reserves in recent trade sales of over 60 cents per gj in the same acreage," Mr Cottee said.
The offer is being fully underwritten by ABN Amro Morgans Corporate Ltd and Wilson HTM Corporate Finance Ltd, with support from existing shareholders. Work will begin almost immediately.
The ramped-up activities will be supported by the Condamine Power Station, for which QGC reached a funding agreement with ANZ Infrastructure Services Ltd last week.
"By building the Condamine Power Station on QGC's gasfield, we will enjoy significant savings in transportation and processing costs, meaning that operating costs will be in the lowest cost quartile for gas fired power stations on the national grid," said Mr Cottee.
Mr Cottee also said he believes QGC can provide cheaper gas than Papua New Guinea, in part due to rising costs of building pipelines.
At 1128 AEST on Friday, shares of QGC were up 2 cents to 79 cents.
© 2006 AAP