Galilee Energy Limited provided the following operations update and announce that a drilling rig has been secured for the upcoming drilling programme at the Glenaras multi-well pilot. Following the servicing and replacement of surface equipment at Glenaras 16 and 21, both of these wells are back online with the average gas rate from the Pilot stable at around 50 Mscfd, with total water production of approximately 17,000 BWPD. Reservoir pressure monitoring indicates that there has been significant progress in depressurisation of the Betts Creek coals but not at an acceptable rate to achieve commercial gas production in a sufficient timeframe.

As previously reported, new modelling undertaken by Schlumberger, taking into account the southwestern permeability conduit fault zone, has confirmed that the significant pressure sink already created can be sufficiently enhanced within 6 to 12 months if five new vertical wells (Glenaras 24-28) are drilled around the southwestern flank of the Pilot. Following the successful capital raising of $11.8 million last week, the Company has now signed a drilling rig contract with Silver City for Rig 23. All landowner and environmental approvals have now been received for the new well locations and civil construction works are progressing with lease pads now under construction.

Drilling is expected to commence in mid-April and all necessary long lead items have been ordered with several items already in storage on site. Planning is underway to construct the electrical, gas and water gathering systems for the five new production wells. All long lead items have also been ordered for the surface facilities, pipeline and electrical network.

Work is well advanced on the design and procurement of a new mobile irrigation system to be constructed and commissioned shortly with the aim of beneficially managing water production. Importantly the water produced is essentially fresh requiring little to no processing and can therefore be used for irrigation, which provides scope for additional direct and indirect revenue streams to Galilee in the future.