Australian energy major Santos has begun drilling its first appraisal well in the Northern Territory’s Beetaloo Basin, representing a move towards potential future gas development in northern Australia.
The process began earlier this month, following receipt of approval for the company’s environmental management plan (EMP) from the Northern Territory Minister for Lands, Planning and Environment in May 2026.
The aim is to verify whether the area’s shale gas reservoir is commercially viable.
The contractor, Exact Contracting, based in the Northern Territory, was chosen to carry out major on-site preparation. The works included construction of the well pad and access infrastructure, prior to the start of drilling.
The appraisal well is located on exploration permit (EP)161, approximately 160km east of the town of Daly Waters.
Santos has held this permit since 2012 and previously carried out seismic and drilling exploration activities within the perimeter.
According to estimates, the Beetaloo sub-basin, part of the larger McArthur Basin, could hold more than 430 trillion cubic feet of undiscovered gas-in-place on a P50 basis.
Santos believes that, if developed on a large scale, the resource has the potential to generate significant long-term economic activity and employment in the Northern Territory and across Australia.
The start of this appraisal campaign comes after Santos successfully commissioned the Barossa gas project, which supplies the Darwin liquefied natural gas (LNG) plant.
The company stated that the Barossa project has created around 300 permanent jobs over the next two decades and is expected to deliver around $1.8bn (A$2.5bn) in wages and contracts in the region.
Santos managing director and CEO Kevin Gallagher said: “The Beetaloo Basin is a phenomenal resource of national importance. Santos is excited to be investing in a Territory that understands what responsible gas development delivers – more jobs and local business opportunities, stronger communities and a resilient economy for Territorians.
“The first appraisal well is a critical milestone as we work to prove the commerciality of this world-class gas resource, with our acreage alone having the potential to supply up to ten million tonnes per annum [of] LNG and serve the northern and east coast domestic gas markets for 50 years or more.
“We have moved methodically and responsibly to secure regulatory approvals, engaged with the community including pastoralists and Traditional Owners, and established the infrastructure to drill safely and effectively.”