State Gas Limited (ASX:GAS) is a junior energy producer and explorer with assets concentrated in the Bowen Basin, Queensland. The company has been listed on the ASX since October 2017 and is set to make the transition from explorer to producer with the imminent start-up of the Rolleston West CNG Project. Although only a small-scale start-up, first gas is always a critical event driver in demonstrating the commercial potential of the assets and providing a platform from which growth strategies can emanate. By selling initially into the spot market, margins will be maximised. With the operating uncertainty lifted and small companies exempt from price restrictions, the timing is ideal for new developments. The assets are located within a transmission pipeline network with adjacent production analogues translating to relatively low operating and commercial risk. The company holds a material net 2C contingent resource base of over 500PJ and the strategy is now to convert resources into reserves and build production at scale.
