Vintage Energy is a natural gas exploration and development company that was formed to address the natural gas shortage in Eastern Australia. It has been listed on the ASX since 2018.

What were the results?

The company reported that the flow test program for its Vali-1 ST1 joint venture had been successfully completed. The two-day test measured a stabilised flow rate of 4.3 MMscfd through 36/64" choke at 942 psi.

Vintage Energy, which holds a 50% stake, said the all flow test objectives were achieved, with data now being analysed to enable reserve assessment.

"As a consequence of the flow testing of the well, our initial estimates of the potential gas flow rate for the Vali-1 ST1 well are in excess of 5MMscfd," the company said.

Operator and 25% joint venture partner Metgasco Limited (ASX: MEL) said information from the testing would be assessed and incorporated into a commercialisation plan for the asset. This would include an estimate of the number of development wells required to efficiently produce gas and maximise returns from the Valie Field.

The company said the joint venture contained an independently verified, gross 2C contingent resource of 37.7 Bcf or 9.4 Bcf Net. 

Metgasco CEO Ken Aitken said: "I look forward to the rapid analysis of the data gathered to enable reserves to be booked and, subject to successful gas sales and tariff discussions, the JV proceeding to a development decision."

About the Vintage Energy share price

At 30 June 2020, Vintage Energy had cash of $3,443,239 up from $2,597,761 at the end of the previous quarter.

The company raised $0.75 million in May 2020 through a share purchase plan and $2.25 million from a placement. The issue price was 3.6 cents per share.

The Vintage Energy share price is up 148.65% since its 52-week low of 3.7 cents. However, the share price is down 48.89% since the beginning of the year and down 34.29% since this time last year.

The post Vintage Energy share price rockets up 9% following flow test appeared first on The Motley Fool Australia.

That wasn't the lowest price reached though. The share price hit 38 cents earlier in the day – a 17% fall from Friday's close of 46 cents.

AJ Lucas is a mining services company, offering drilling services to the coal and coal seam gas industries,  but also offers construction and engineering services outside the sector.

It's been a rollercoaster ride over the past month, with the company's shares spiking to 60 cents on October 4 and October 7, after AJ Lucas announced that Cuadrilla Resources had been given permission to drill and frack (hydraulic fracturing) up to 4 horizontal gas wells at the Preston New Road exploration site in Lancashire, the UK.

It's only the second-ever permit since a moratorium on fracking was lifted in 2012. Third Energy received the first approval earlier this year for a project in Northern England.

The UK secretary of State for Communities and Local Government also advised that he could grant similar approval for another site – Roseacre Wood. AJ Lucas has a 46.85% in the Bowland licence that encompasses both exploration sites, and a 45% shareholding in Cuadrilla.

It's a hot topic in the UK as you might expect.

The UK government imports more than 50% of its gas currently and that is expected to rise to 80% by 2020. The development of its own shale gas industry is seen as a virtual necessity by the UK government, restoring its energy security as a result of decreasing supply from the North Sea gas fields and dependence on imported gas.

The UK is estimated to have enormous amounts of shale gas, but progress has been hampered by public opposition and regulatory hurdles. Environmental groups are concerned the fracking will contaminate groundwater, not to mention that many are opposed to fossil fuels.

The local government had rejected Cuadrilla's request for a permit, but that was overturned by the UK government – indicating the government's determination to start a local gas industry.

Australian oil and gas companies Santos Ltd (ASX: STO) and AGL Energy Ltd (ASX: AGL) have faced similar opposition here, with AGL giving up the fight earlier this year in Queensland and NSW.

Metgasco Limited (ASX: MEL) won a court case against the NSW government, but shareholders voted to accept $25 million from the NSW government late last year to buy back three CSG exploration licences. Victoria has already banned drilling for coal seam gas (CSG).

Foolish takeaway

It looks like a rocky road ahead for AJ Lucas shareholders. UK environmental groups aren't likely to lie down quietly and could potentially tie up gas drilling for ages. That's the most likely reason for shares sinking today.

The post Why the AJ Lucas Group Ltd share price crashed today appeared first on The Motley Fool Australia.

AGL had planned to build more than 300 wells at the project, at a cost of around $1 billion, but falling oil and gas prices and lower than expected production volumes made the project uneconomical.

AGL will hand its petroleum exploration licence back to the NSW government and will 'commence a comprehensive decommissioning and rehabilitation program for its well sites and other infrastructure in the Gloucester region'.

The company says it will establish a $2 million Independent Trust Fund and will work with the Gloucester community to identify investment options to deliver ongoing economic benefit to the region.

AGL will also cease production at the Camden Gas project in South West Sydney in 2023, 12 years earlier than previously proposed. Without the Gloucester project going ahead, the company says there are limited opportunities for scale and efficiencies, and the Camden site and wells will be progressively decommissioned and the site rehabilitated.

There is large public support to stop coal seam gas (CSG) projects going ahead, and the NSW state government has ruled large areas of land off-limits for CSG drilling, including potential for those zones to be expanded. However, AGL Energy had warned that the regulations would wipe $2 billion off the NSW industry and put thousands of manufacturing jobs at risk because of rising gas prices.

Santos Ltd (ASX: STO) could be next in the firing line, with its plan to drill for CSG in the Pilliga State Forest in northern NSW. The company has anticipated that it could one day supply 50% of NSW's gas needs but the NSW Opposition has vowed to ban CSG production in the state forest.

Metgasco Limited (ASX: MEL) shareholders voted last year to accept the state government's offer of $25 million to buy back the company's three Northern Rivers CSG licences, in another win for enviromentalists and groups opposed to CSG drilling.

Victoria has totally banned unconventional gas exploration including coal seam gas since 2012, but that could change pending the outcome of a review later this year.

Foolish takeaway

Environmentalists can mostly thank falling oil and gas prices for AGL's decision to exit CSG, and it's likely that the current low prices will stop many CSG projects from advancing.

The post Environmentalists rejoice as AGL Energy pulls out of NSW CSG project appeared first on The Motley Fool Australia.