The announcements are always careful to state flow rates will start off slow. That is because the desorption pressure is reduced starting at the top of the water column. Say 0.2 m of the coal is now below the desorption pressure. As more water is removed and the desorption pressure boundary moves down the more gas will flow. Most coal seams are economic with 1-10m of coal, so we can release the cork from our champagne at that point. What is special about Gurvantes is that we have another 40m of coal to go! Who knows the final flow rate, but we could have a monster on our hands. The implication is that if the payback time is good enough it will lower the total capex to free cash flow and opens up the possibility of bootstrapping production with a partner rather than selling outright. TPD board is wise to wait until the pilot is complete to assess strategic options.
TPD Price at posting:
16.5¢ Sentiment: Buy Disclosure: Held
