Leigh Creek Energy shares jump as the company claims to have the biggest gas deposit in South Australia

Leigh Creek Energy shares have jumped more than 20 per cent after the company said it had defined a gas resource “larger than reserves currently located within the Cooper Basin’’.

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Leigh Creek Energy shares have jumped more than 20 per cent after the company said it had defined a gas resource “larger than reserves currently located within the Cooper Basin’’.

The company’s shares were trading 7.5c, or 23.8 per cent, higher at 39c in early trade.

LCK recently completed a trial of a pilot plant at its underground coal gasification project at Leigh Creek.

The company said analysis of the results of the trial showed it had 1153 petajoules of proved and probable synthetic gas at the project.

LCK said its gas reserve was contained entirely within one of the three coal seams located within the Telford Basin, “meaning there is additional opportunity for reserve and resource upgrades in the future from the other seams’’.

“The size of the reserve and scope for more certifications at the former Leigh Creek coal mine site means LCK has capacity to enter both the pipeline gas and fertiliser production markets.’’

The in-situ process being used by LCK involves igniting coal seams underground and capturing the partially combusted gases as they escape.

Managing director Phil Staveley said the company’s gas reserve was large enough to support operating 20 or more chambers in commercial applications for over 20 years.

“LCK has achieved all its milestones, many of which the market doubted,” Mr Staveley said.

“We now have gas at Leigh Creek that has been independently certified as suitable for a commercial project, and unequivocally represents one of East Coast Australia’s largest undeveloped, uncontracted and undervalued gas reserves.”

LCK said it was “working through negotiations with potential gas buyers for use on the domestic market, while it progresses the scoping aspects of the lucrative fertiliser business case.’’