from b1 to cbm93001...and beyond.

Folks

I've put together a brief commentary on the proceedings from B1 to CB93001.

So after 2 wells we know that the coal extends from B1 (160m thick), to CBM93001 (116m thick). Thats the deeper part of the 50 km seismic line. There's another 20kms from the Bore to CBM93001 & that towards the shallow part of the basin.

Many of u would have wondered, about the exhaustive coring undertaken at CBM93001. Let me try to explain the rationale behind this.

CTP's have quoted a fig. of 33.7 TCF as a best estimate at 50% recovery rates (high estimate is 50.6 tcf). This 33 TCF can sustain a GTL plant for 66 years of operation

CTP also know the size of their acreage & the extent of the Purni sequence. They've used a conservative figure of 40m net thickness of coals in their models. What they didn't have prior to coring, and have used as corelation from nearby Bowen & Galilee Basins, was the gas saturation for these deep/thicker coal.

They've used a value of 11 cu.m/ton from core sections from a well from the Bowen Basin in their model. This core was from depths of ranging from 420m to 600m, i.e. shallow depths.

Now here's the good bit, gas saturation increases with depth & maturity of the organic matter of the coal & hence one of the key drivers behind coring besides the porosity/permeability etc.

On CBM93001, they've cored pretty much a large section of Purni Coals. The lab results will give a new/higher, gas saturation factor to tweak into their model. A cut off depth of 1250m is considered economical for CSG/CBM projects & thats why this was intended to b TD's at 1250m.

In the Galilee basin, Enron (the US mob) consider a 1000m deep well with low gas saturation as economical.

So knowing that Purni will b CTP's production horizon for the CBM/GTL project, i wouldnt b surprised to see a re-rating for the estimate in the future.

These guys may b old-school but they r working with very strong fundamentals. Someone out there will soon start to appreciate this & take them to the next level, I hope.

In conclusion, I leave u with some interersting stats to think about

1) Use A$2.20/mcfg for this 33.7 TCF reserve.
2) 33.7 TCF gives 3370 MMbbls of liquid (50.6 tcf=5060 mmbbls)
3) 3370 mmbbls sustains a GTL plant for 66 years or 5060 mmbls for 99 years
4) Need to drill 560 shallow wells (ie upto 1250m deep) to produce 0.25 MMCFD
5) Need more capital layout & thats where a bigger player & balanced funding comes into picture.

The caravan rolls onto Simpson later nxt week, which should b good as well.

Have a good w'end all.

Cheers