Australian junior Empire Energy has hit gas in its latest shale exploration well in the Northern Territory’s onshore Beetaloo basin.

Empire confirmed Wednesday the vertical section of the Carpentaria-2 well had been completed to a depth of 1835 metres and intersected thick liquids rich gas shales across the four stacked Velkerri formation pay zones.

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It added strong gas shows had been encountered across the target formations, with live gas bleeding from core samples.

Empire’s well log interpretation also indicated a strong correlation in thickness and rock characteristics of the four stacked shale targets to the recently drilled Carpentaria-1 well, which lies 11 kilometres away.

The target shales were about 240 metres deeper in Carpentaria-2, compared to the initial exploration well, consistent with Empire’s pre-drill seismic interpretation.

“Increased depth is likely to support increased flow rates while maintaining a cost advantage over deeper drilling,” Empire managing director Alex Underwood said.

“Live gas bleeds witnessed in sidewall core samples we cut from the target shales further enhance our view that strong production rates may be achieved once we commence flow testing.”

Empire has now started drilling the horizontal section of the well, targeting the Middle Velkerri B shale, which was the strongest contributor to gas production of the four target formations in the Carpentaria-1 vertical flow test.

Following the drilling, casing and cementing of the horizontal section, Empire plans to suspend the well over northern Australia's wet season.

Empire said it would make preparations for fracture stimulation and flow testing of the horizontal section over the wet season, with operations expected to resume in the second quarter of 2022.

Carpentaria-1 and 2 lie in EP187, where a recent independent assessment by Netherland, Sewell & Associates Inc (NASI) placed the best estimate prospective gas resource at 3.5 trillion cubic feet.