• Diona-1 well drilled to 2,479m, encountering 181m hydrocarbon-prone Permian-to-basement sequence
• Significant overpressured gas column and gas kick detected, indicating presence of Permian hydrocarbon-bearing sandstones
• Drilling operations continuing to target depth of ~2,530m, followed by wireline logging

Xstate Resources Limited (ASX:XST) has provided an operational update on the drilling of the Diona-1 well within the Diona block of ATP2077 located in the Surat-Bowen basin of Queensland. As of the time of writing, the Diona-1 well had reached 2,479m measured depth, drilling through both the primary and secondary targets. While the primary Jurassic target in the Showgrounds Sandstone was found to be well developed but non-hydrocarbon bearing, the well encountered a 181m hydrocarbon-prone Permian-to-basement sequence upon entering the Permian. This included a significant overpressured gas column and a kick that required several increases to drilling mud weights and circulation of gas out of the hole. Logging While Drilling data currently indicates that several Permian-aged hydrocarbon-bearing sandstones are present within the Diona-1 well, which warrant additional logging and testing. The company is now continuing drilling operations to the final target depth of ~2,530m, which will be immediately followed by a wireline logging campaign to acquire additional data prior to releasing the final interpreted results. The Managing Director, Andrew Bald, commented that the Diona-1 well has proven the presence of moveable hydrocarbons across an unanticipated 180m+ (gross) column of the Permian section, and that the company cannot rule out the possibility of intersecting the updip edge of the Taroom Basin Centred Gas play, which could offer the opportunity to prove up a significantly larger unconventional resource.

The company is excited about the potential of the Diona-1 well and is looking forward to seeing the outcome of the wireline logging. The proximity of the Diona project to existing infrastructure, such as the Waggamba to Silver Springs gas pipeline, offers the potential for a rapid path to market if the discovery is confirmed.