The Mineral Resources Ltd [ASX:MIN] share price is slightly up today after releasing a drilling update on their Lockyer Deep-1 gas exploration well.
Mineral Resources is a Western Australian mining services company that’s exposed to a range of projects in commodities, such as iron ore and lithium, but is also involved in the energy sector.
Mineral Resources announces gas discovery
Lockyer Deep-1 is a well in exploration permit EP368 located in the Perth Basin in Western Australia. It’s a joint venture between Mineral Resources’ subsidiary, Energy Resources Ltd, which has an 80% stake, and Northern Energy NL [ASX:NEW], with a 20% stake.
Mineral Resources announced today they found ‘a significant gas bearing reservoir’ in Kingia Sandstone. They intersected the top of the Kingia Sandstone at 4,041 metres, which was marked by a significant drilling break along with elevated gas readings.
They also identified gas potential at High Cliff Sandstone, several gas peaks within Dongara-Wagina, and a potential oil resource at Dongara Sandstone.
Mineral Resources has pledged to be carbon neutral by 2050. Their goal is to reduce their dependence on diesel and provide energy security for the company’s mining operations. To this end, they’ve been looking to transition into solar and wind but also natural gas.
Chris Ellison, Mineral Resources’ Managing Director, had this to say:
‘The success at Lockyer Deep-1 exploration well is a fantastic start to our significant gas exploration program, as we seek to provide natural gas to power our own operations in conjunction with renewable energy sources such as solar and wind.
‘This gas discovery is an important step to securing our decarbonisation pathway and providing energy services to the Western Australian mining industry as it transitions to a lower carbon future.’
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What happens next to the MIN Share Price?
Mineral Resources expects to complete a production test to assess gas flow rates.
Mineral Resources’ share price has been climbing in the last 12 months, aided by high iron ore and lithium prices. At time of writing, the share price is trading at $52.20, up close to 1% from yesterday’s close and over 34% since the beginning of the year.
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