Arrowhead Research, page-19

As a disclaimer, you should probably ask someone better educated about this than me (@Wonkers probably knows more than I do about coal reservoirs) so I apologise if there are any mistakes below.

That said, I think the coals are possibly too deep, but I hope to be proved wrong (I love to see technology advancing, and boundaries being pushed)

My reasoning:
The deepest productive coals I am aware of are in the Cooper Basin which sit around 3,000m. Daydream 2's coals are all deeper than 3,700m, which (I believe) would make them the deepest productive coals in the world. For comparison, most CSG in Queensland is in the 100s of m, rather than 1,000s, although those projects mostly require dewatering. There are other deeper coal plays (the Piceance Basin has coals at around 2,500m) but these are very unusual. A bunch of deep coal plays (and coal plays in general) around the world just don't work.

I believe at the time the Cooper Basin coals were targeted the depth was considered to be really pushing the envelope for gas production from coals. Previous "wisdom" typically put the floor for productive coals at 2km (and many people felt it was much shallower), but the Patchawarra Coals had some particular properties that made them "work" (most critically, high inertinite seems to have let to the preservation of bigger pores, and therefore more perm, than in some other coals).

Despite "working" the flow rates from coals in the Cooper Basin were never immense BUT these rates were economic if the coals were fracced into from vertical wells that were targeting other reservoirs anyway - the coal was a nice bonus, but not worth targeting on it's own. This might be something EXR could try, but it might be tough if horizontal wells are needed...

A couple of positives (so the holders don't accuse me of being overly negative!):

1. Technology is always improving, and we are always pushing the boundaries with what is possible regarding reservoirs we can produce from, so there is likely to be a deeper coal play at some point. Who knows, maybe it will be this one!
2. In my opinion, the coal (and to a certain extent the Lorelle Sandstone) are not particularly important. They are useful in announcements to get small-scale (non-technical) investors excited, but the key prize is the "bulk" tight play that all the other companies in the area are interested in.
3. For what it is worth, I don't actually think EXR need to "crack the code" in terms of understanding how to produce from these reservoirs (and I'm not sure they are even trying that hard to do that). As far as I am concerned, the main thing EXR needs to do is fulfil its obligations under the ATP license while one of the bigger players figures things out. To be honest, I think the approach they have taken is pretty sensible - do pretty much the cheapest/bare minimum they can do to fulfil the obligations, while making sure they get the R&D money back!