Mineral Resources (MinRes) has made a significant natural gas discovery at North Erregulla Deep-1 (NED-1) conventional exploration well, near Dongara town in Western Australia.

The NED-1 well is located on the Exploration Permit EP 368 in the northern section of the onshore Perth Basin, about 8.3km southeast of the Lockyer Deep-1 natural gas discovery.

MinRes commenced drilling on 28 April this year and reached the Kingia Sandstone objective at 4,205m measured depth relative to the rotary table (MDRT).

The company continued the drilling to a total depth of 4,446m MDRT, following the completion of drilling, coring and wireline logging at the NED-1 exploration well.

Wireline logging confirmed a 37m gross pay interval between 4,205m and 4,242m MDRT.

The full coring of the reservoir showed elevated gas readings and high rates of penetration, indicating superior conventional properties.

MinRes said that the NED-1 showed around 28m of interpreted net gas pay within this interval, with a net pay zone of superior quality and an average porosity of 17%.

The drilling results suggest North Erregulla Deep structure is a discrete natural gas field.

Additional appraisal wells are required to determine the free water level and to further define the gas resource potential of the North Erregulla gas field.

MinRes Managing Director Chris Ellison said: “The success at North Erregulla Deep-1 is another stride forward in our Perth Basin exploration campaign and our second significant natural gas discovery in less than two years.

“I am pleased to confirm the appointment of Darren Hardy as Chief Executive, Energy, to lead MinRes’ energy transition strategy. His immediate focus is the successful completion of the Perth Basin drilling campaign and the development of these major discoveries into production.”

MinRes has also announced the early results from the first major exploration programme at its Mt Marion lithium mine, which confirmed significant exploration potential for the mine.

The company has completed around 34km of drilling to date, using six diamond and reverse circulation (RC) drill rigs.

In addition, MinRes has terminated its agreement with Chinese lithium mining company Ganfeng to convert Mt Marion spodumene concentrate into lithium battery chemicals.

The parties have further confirmed that there will be no payments under the Agreement in respect of the sales of lithium battery chemicals in the calendar year 2023.

Ellison added: “The exciting exploration results at Mt Marion highlight we are just scratching the surface of the potential lithium resource, including the possibility of underground mining.

“The early termination of the Mt Marion toll treatment agreement with Ganfeng is a sensible outcome given prevailing market prices, with our world-class lithium assets well-placed to capitalise on growing demand.”