Gas companies are ready to start drilling again after striking trouble at the showpiece Kyalla 117 well near Daly Waters.
Origin Energy and exploration partner Falcon Oil and Gas yesterday announced work had started to drill a horizontal hole from its deep well in preparation for fracking.
The companies were unexpectedly forced to plug the first hole drilled sideways in its deep horizontal shaft several weeks ago.
Origin Energy says the "operational challenges" which led to the plugging of a long horizontal shaft on its Kyalla 117 well exploring for gas near Daly Waters were "not uncommon".
Kyalla 117 was the subject of a celebratory NT Government media release back in October saying the first steps towards developing an onshore gas industry in the NT had been made after a three-year moratorium.
Primary Industry and Resources Minister Paul Kirby in October said the successful drilling of the Kyalla 117 well, as part of Origin's Beetaloo Exploration Program, was a milestone.
The companies said work had started to "sidetrack" from the vertical shaft to drill the new horizontal hole.
"This new horizontal section will again target a lateral length of 1000 to 2000 metres within the Lower Kyalla shale at a depth of 1800 metres," the companies announced.
"Drilling results to date have been encouraging," Falcon chief executive Philip O'Quigley said.
"Falcon remains very optimistic about the potential of the lower Kyalla shale play," he said in a statement to the London Stock Exchange yesterday.
"We look forward to updating the market as further results become available."
By the end of November, the companies had successfully drilled the vertical shaft almost two kilometres deep into the Beetaloo, finding a 900 metre gas-rich layer of shale as they did.
After completing the vertical shaft, the success of fracking is being able to drill sideways from that main shaft, to drill a long horizontal shaft the width of a dinner plate.
It is this drill hole which is fracked, to open up the fractures in the shale to release the gas.
Earlier in the month, Origin general manager for Beetaloo and Growth Assets Tracey Boyes said there were no issues with well integrity.
"We're drilling horizontally in a 50m thick shale that's over a kilometre below the nearest aquifer, with several layers of impermeable rock in between," Ms Boyes said.
"We decided to stop part way because if we continued and completed drilling and lined the bore hole it wasn't going to adequately meet our specifications to undertake fracking and do good test of the well's potential.
"To help visualise, we're drilling a hole that's 8 and a half inches wide and were couple of inches wider in places over a 700 metre partially drilled section. These are the robust operational standards and controls we apply."
Origin wants to drill the horizontal hole between one and two kilometres long.
"What we're doing - plugging back and side tracking from an existing vertical well - is not an uncommon thing to do in exploration drilling and poses no additional risks," Ms Boyes said.
"Fracking will proceed following the successful completion of drilling and after the integrity of the well is independently tested and verified."
Protect Country spokesman Dan Robins said: "Protect Country Alliance remains concerned following the recent drilling incident at Origin's Kyalla 117 well.
"We renew our call for there to be a full investigation into what occurred, and for the information to be made public.
"Shale gas drilling in the Beetaloo Sub-Basin is an extremely risky venture, and Origin appears to have been unable to even get the basics of drilling right without incident.
"The company should not be permitted to drill this well, especially during the wet season. Over 6000 people wrote submissions last year opposing the drilling of this well. Territorians are right to ask why this well would be allowed to be drilled at all."
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