Galilee Energy Limited (ASX: GLL) ('Galilee') is pleased to provide an update on the Glenaras Gas Project in the Galilee Basin in Queensland.

The Glenaras Gas Project ('Project') is located in ATP 2019, which is 100% owned and operated by Galilee. The Permit covers an area of approximately 4.000 km2.

The Project has one of the largest contingent gas resources on the east coast and is strongly positioned to supply the AEMO's forecast eastern Australian domestic market gas shortfall in the early 2020's. The Project's independently derived and certified Contingent Resource within the Betts Creek coals are 1C of 308 PJ, 2C of 2,508 PJ and 3C of 5,314 PJ, which represents sufficient gas supply to fulfil 25% of eastern Australian domestic market needs for over 30 years (3C Contingent Resource at 650 PJ/year).

Glenaras Pilot Enhancement Programme

Information from the Glenaras 17A well drilled in the previous quarter resulted in the company engaging Schlumberger to undertake a detailed reservoir simulation study. This work was successfully completed in the quarter and the key outcome was to drill additional vertical wells around the lateral wells to enhance the reservoir pressure drawdown and accelerate the onset of gas production.

The programme was conducted safely, on-time and within budget, and each well intersected the Betts Creek coals in line with prognosis. The rig was released from the final well on 16th October 2020 and each of the wells have been cased and suspended for future production.

The completions rig has commenced completing the five wells with the installation of subsurface pumps, tubing and wellheads. Surface facilities and gathering system construction is well underway with approximately 90% of the water and gas flowline installation works completed as at midOctober. Some 75% of the underground power network has been completed. The power generation site is now complete and ready for the delivery of the generation units which are scheduled to be received at the end of October. The wellsite metering skid fabrication and assembly is largely complete with installation to follow on from the pump completions in each well. The Company is targeting the first of these wells to be on-line by mid-November.

Glenaras Water Management Project

A water management strategy has been adopted for the Glenaras Gas Project and significant progress has been made implementing the plan. The centre pivot irrigation system is now operational with irrigation commencing in September. This system provides both a viable water solution for the Project as well as assistance to landholders for livestock management during the prolonged drought in this area. The pivot irrigation system utilises produced water from the wells with the water requiring no treatment other than cooling. The first sorghum forage crop was planted in mid-October.

The pivot irrigation system is easily scalable providing a flexible and low-cost solution for produced water at the Project. Additionally, the Company has selected the water treatment technology provider for the processing of 2.5 ML/d, (15,000 BWPD) of produced water. This treated water will be used in the managed aquifer recharge project recently approved by Queensland Department of Environment and Science.

Potential Commercial Area (PCAs)

The Company has taken the next key step in the commercialisation of the Glenaras Gas Project. To ensure the long term security of the full Contingent Resource within ATP 2019, Galilee has submitted two applications to the Queensland Government for Potential Commercial Areas (PCAs).

The two combined PCAs cover the full Contingent Resource in ATP 2019, with proposed tenure terms of 15 years and 10 years respectively for PCA 314 and PCA 315. The areal footprint of the combined PCAs is in excess of 3,200km2 in size, which by way of comparison, would comfortably encompass the prolific Spring Gully/Fairview coal seam gas fields or the combined Undulla Nose coal seam gas fields in the Bowen and Surat Basins respectively. This highlights the expansive size of the Project's Resource base.

Successful award of both PCAs will enable Galilee to complete the exploration and appraisal programme across ATP 2019 and mature the considerable Contingent Resources to Reserves for subsequent delivery into the east coast gas market.

Work is ongoing with a number of potential gas purchasers and discussions are being progressed across a range of outcomes including domestic sales to gas retailers, gas supply for power generation projects, gas supply for renewable projects, potential third party farm-ins and pre-investment in the Project.

Contact:

Peter Lansom

Tel: +61 (0) 7 3177 9970

About Galilee

Galilee Energy is focused on creating a mid-tier exploration and production company building on its core strengths in coal seam gas appraisal and development. Its primary area of focus is Queensland where it is appraising the Galilee Basin and exploring in the Surat and Bowen Basins whilst looking to add further high quality acreage to its portfolio.

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