A number of posters have been just a little ... we shall say reserved ... about how EPG may have secured potentially stunning gas reserves in the midst of Europe under the noses of very established energy producers, suppliers and distributors.
Well, in what appears to becoming a pastime, an hr or so of googling tonight has thrown up the following;
1. France derives abt 80% of its energy from nuclear power plants and guess what, natural gas now makes up most of the balance. No wonder the recent and possibly ongoing Russian gas supply disruptions rattled them.
2. After a proud 200 yrs of coal mining in France, the last mine closed in early 2004. So for many yrs coal and things related are likely to have been off the investment radar.
3 In France and the UK there are lots of references to coal mine methane (CMM) extraction for power generation from abt the mid 1980's. This method relies on extracting methane that has seeped into old workings. Poor recorded knowledge of several hundreds of yrs of workings have made reserves estimations difficult and as a result, unattractive propositions for financiers. Not many articles seem overly encouraging.
4. In America, most of the reportedly 6000+ methane gas wells drilled over the past decade have been associated with coal bed methane (CBM) where virgin coal seams are intercepted, stimulated and the methane is extracted. Reseves estimates are a pretty straight forward issue and most importantly are regarded and reliable, bankable assets by financiers.
5. So back to Europe and France in particular. Coal as an industry is dead and buried. Probably, there was discouragement over early attempts to commercialise CMM. Possibly the difference between CMM and CBM wasnt appreciated and hence wasnt valued at all by the French or the greater European community say as recently as 2 to 5 yrs ago.
6. At precisely that time, KBO/EPG was a company actively seeking more prospective opportunities than their main Canning Basin permits and tiddly production in Australia. Sydney Gas was breaking new ground in CBM here in Australia. I am pretty sure KBO had a look at other CBM plays in eastern Europe in the early noughties and for whatever reason found that they didnt stack up. So when The French permits became available via a struggling Heritage there could have been reaonable inhouse knowledge to quickly evaluate and recognise potential.
Just a few different thoughts for tonight. Again they have my trademark rosy outlook, so pick away fellas. Polite skepticism makes for healthy debate.
Cheers Poyndexter
EPG Price at posting:
0.0¢ Sentiment: Hold Disclosure: Held
