re: Ann: Comet CSG Prospect - Thickest Coal S... hi folks,takFerret's stock to watch: Bow Energy Limited. 07/09/2009 12:28PM AEST
Ferret's stock to watch: Bow Energy Limited
OVERVIEW
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Bow Energy Ltd (ASX:BOW), the Queensland coal/gas explorer, has been a punter's dream, almost doubling in price over about a month and a half.
The market has been reacting to a steady stream of reports indicating the company is on the right track and coal/gas is currently king in the export business.
Last week, Bow Energy continued the flow of encouraging results from the exploration drilling programs in the Comet and Blackwater coal seam gas (CSG) fields in Queensland, 230 kms west of Gladstone, where several export CSG to LNG projects are planned by third parties.
Comet's thick coals desorbing gas was intersected in the first two wells.
CM-1 intersected 22.5 metres of coal desorbing gas and CM-3 intersected a total 26 metres of coals desorbing gas with 11 metres in the Rangal Coal Measures and 15 metres in the Burngrove Coal Measures.
This represents the thickest target coals intersected to date in the Blackwater and Comet CSG fields.
Drilling has commenced on core hole CM-2 which has intersected 5.4 metres of coal to date.
Drilling is currently at a depth of 345 metres with a target depth of 700 metres.
At Blackwater, Bow is preparing for a 2P reserves certification program.
To date 559 PJ of 3P reserves have been certified in the Blackwater CSG field from the Rangal Coal Measures only.
Additional prospectivity remains in the Burngrove Coal Measure.
The final 3P program core well in the field, BW-6, is scheduled to commence within the next 1-2 days.
Bow is still on track to begin a multi-well 2P appraisal drilling program on the Blackwater CSG field later this month.
On August 28, Bow Energy used the same phrase of encouraging results in describing exploration drilling programs in the Comet and Blackwater CSG fields.
Bow has had early encouraging drilling results from the first two or three planned core holes currently underway on the Comet CSG.
The prospect has coal thicknesses and depths similar to the Blackwater CSG field.
The Comet CSG prospect is located immediately north of the Blackwater CSG field in ATP 1025P and has Rangal and Burngrove Coal Measures as the primary targets.
CM-1 has drilled to a total depth of 750 metres intersecting 22.5 metres of coal in the Rangal and Burngrove Coal Measures.
Preparations are being made for permeability testing.
CM-3 has drilled to a depth of 355 metres towards a target depth of 575 metres.
To date the well has intersected approximately 19.4 metres of coal with further coal expected from the Burngrove and Fairhill Coal Measures.
Early desorption of the coal cores suggest similar high gas contents as those encountered in the adjacent Blackwater CSG field.
Bow is preparing for a 2P Reserves Certification Program at the ATP 1025 Blackwater CSG field.
To date 559 PJ of 3P reserves have been certified in the Blackwater CSG field from the Rangal Coal Measures.
Bow has completed drilling and testing on core holes BW-5 and BW-7 which are targeting additional reserve upgrades from the Rangal Coal Measures and initial reserves from the deeper Burngrove Coal Measures.
The final 3P program core hole in the field, BW-6, is scheduled to commence imminently.
Bow is on track to commence a multi-ell 2P drilling program on the Blackwater CSG field mid to late September.
Bow has engaged MHA Petroleum Consultants, LLC (MHA) to advise it on a drilling and testing program with the aim of upgrading 3P to 2P certified reserves in this field.
Subject to final approval, the initial 2P drilling program may consist of five production testing wells and three monitor wells.
Additional infill drilling will likely be required but these locations will be determined after the analysis of the early results from the initial 2P production wells.
Bow Energy has announced a major upgrade to the certified CSG reserves for its Blackwater CSG field in the Bowen Basin with significant future reserve upgrades expected from the field.
MHA Petroleum Consultants has certified 559 petajoules (PJ) of 3P gas reserves for the Rangal Coal Measures within the Blackwater CSG field.
This represented a 385 PJ (321 per cent) increase over the previous 3P reserves certified in the field and takes Bow's total net 3P reserves to 664 PJ.
Bow has drilled six wells of a sixteen-well exploration drilling program in the Comet block, which contains the Blackwater CSG field, and Norwich Park block which commenced in May following the grant of the blocks in March this year.
Early results have confirmed an average coal thickness of 23 metres of gassy coal seams across the Blackwater CSG field, along with encouraging signs of permeability and high gas contents over both the Rangal and Burngrove Coal Measures.
Bow's managing director Ron Prefontaine said the drilling results indicate the potential of further reserve upgrades in the Blackwater CSG field.
SHARE PRICE MOVEMENTS
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Shares of Bow Energy gained 4c to $1.54 on Friday. Rolling high for the year is $1.59 and low 14.6c. The shares stood at 81c on July 1.
The company has 213.6 million shares on issue with a market cap of $329 million.
BACKGROUND
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Bow Energy Ltd joined the Australian Stock Exchange list on May 20, 2005.
The company is an exploration company focused on the discovery of commercial oil and gas fields with projects in several of Australia's producing Basins.
One broker review said Bow's upside value is expected to be driven by increasing 3P and 2P certified gas reserves currently in progress.
Should the company's business plan progress favourably throughout 2009, Bow is likely to be positioned as a significant mid-tier upstream energy company by the conclusion of 2010.
John De Stefani, CEO Commercial said the company's primary focus over the next six to eight months will be on upgrading certified reserves in its coal seam gas projects, particularly the Bowen Basin blocks.
Bow has increased its gas reserves target by 50 per cent with 900PJ of 3P and 450PJ of 2P certified reserves now targeted by the end of 2010.
The increase has come on the back of strength from the company's wholly owned Comet block and Norwich Park block, located in the Bowen Basin, which have multiple coal measure targets.
Bow was awarded and granted these two high-potential permits in the March quarter, and a third block, Gunyah, is subject to Native Title.
All four of Bow's major CSG projects, Don Juan (55pc Bow), Norwich Park, Comet and Gunyah have both domestic supply and export market potential.
Further highlighting the value of Bow, the company has a proven business development management team and is in a strong cash position to deliver on its planned reserve target.
The group has a clean asset base with 100 per cent ownership interest in key tenements, operator positions and significant uncontracted gas potential in regards to resources located at Gladstone.
These are expected to be a key value driver for the future success of Bow.
Bow's main priority to be carried out for 2009 is to meet its goals set out in recent announcements and focus on drilling its assets.
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