made the top 300, page-19

Here is the post in full for the link i posted above... a bot more info on my thoughts for UCG vs CSG

UCG vs CSG... I don't think its that simple. I think both industries will co-exist.

CSG has the head start, is cost effective compared to UCG, and is now publicly accepted as a way to meet future energy needs. Massive environmental issues that are finally being raised, but with good management I believe that these issues can be dealt with and value actually found from the CSG water.

A big thing to note is that UCG and CSG target different coal seams. Basically... UCG is targetting coal seams 150m to 300m deep only, in an attempt to commercialise coal seams that can not be utilised using open cut mining. Everyone knows underground mining of coal is a massive no no... so UCG is the next step. UCG must have ideal areas of geology and depth of coal for their operations. It can't be any old coal seam. The surrounding characteristics of layers of the earth also need to be ideal, with no faults that would allow seeping into other layers. They need a seam I think at least 5m thick, and as I said at a depth of 150m to 300m. So the areas that UCG will be able to be used on will be somewhat reduced by these parameters. IT can't be rolled out everywhere there is coal!!! Offsetting that is that UCG can recover some 75% of the energy of the coal seam, whereas CSG only recovers approximately 5%.

So CSG, which has much more scope to tap into all coal seams down to depths I believe of almost 1000m can be much more widespread than UCG. This sets up an environment where both industries can operate together. I would see the pecking order being Open cut mining (almost full recovery of coal), UCG (75% recovery), then CSG (5%). This pecking order will be all determined by the characteristics of the coal seam and surrounding geology. I would say that out of these 3 that UCG would actually cause the least distrubance to the environment.

The main conflict of CSG vs UCG is where the tenements overlap. Hopefully a sensible solution can be reached on this. From my understanding UCG probably needs to operate a certain distance away from CSG as they need the water table in place to operate, whereas CSG drains the water table to let the gas flow. Not at all sure what distance this is but from the bus tour it sounds like LNC have a fair idea.

Finally the last CSG v UCG issue is the use of the gas. In the CSG industry, as was said at the conference has "everyman and his dog" building an LNG plant. So that sector is predominantly looking at export. A funny remark by Justyn Peters was that LNC is not everyman and his dog. They, like the other UCG players, are predominantly looking at the domestic market for their products, which will be derived from their gas. LNC looks to be targetting petroleum, CNX fertilisers etc, and CXY power at this stage with an eye on CTL as well.

In any case I know the future in the surat basin is looking very positive, and that all players are likely to have success if eveyone can proceed with level heads and base decisions on a free and complete flow of information and facts.

A big thing to note as well is that the majors are getting into both industries. Shell, Petronas, BG etc are all very interested in CSG in Australia now. Shell, BP, Sasol and other majors are beginning to really pursue UCG as well. I would not be surprised if we begin to see BHP or Xstrata look at UCG soon as well... its the next step to commercialise the coal seams that are unable to be accessed by open cut mining, and they both own a lot of mining tenements!!!

I hold shares in QGC, AOE, MPO, LNC and CXY. I used to own shares in SHG but sold after the QGC offer and bought more LNC. CXY and MPO are my largest plays in both sectors. CXY as it is headed up by Dr Len Walker... who I regard as the godfather of UCG. MPO because it's undervalued compared to its peers on a 2P basis, and the canadian assets are a company maker.

Thats enough from me for now!

Cheers

Pukin