there may be more to it?, page-15

An interesting announcement from ROG.

ASX Announcement
RED SKY ENERGY TO ACCESS METHANE ENHANCEMENT TECHNOLOGY
Key Points:
 Red Sky to secure rights to new technology that could yield methane quantities from coal in
excess of that produced using conventional coal seam gas techniques.
 The technology has been shown to perform well on low rank coals of the type found within
Red Sky's substantial exploration acreage in northern NSW and southern Queensland.
 Red Sky plans to demonstrate the technology in a single well demonstration project.
Red Sky Energy Limited (ASX: ROG) (?Red Sky? or ?the Company?) today signed a binding terms sheet
with Enhanced Biogenic Methane Limited (?EBM?). EBM holds an exclusive Australian licence to
biogenic methane enhancement (?BME?) technology from the Western Research Institute (?WRI?) of
Wyoming, which is at the forefront of development and application of this technology.
WRI has been selected by EBM because of their development of patented BME technology over the
past five years.
EBM, a company associated with the Managing Director, Mr Rohan Gillespie, is finalising plans for a
demonstration project on lignite in Victoria with the results from this project to be made available to
Red Sky to assist planning of the Red Sky demonstration project.
EBM Term Sheet
The following key terms will be incorporated into definitive agreements:
 Red Sky to fund a single well demonstration project, at an estimated cost of $600,000, within
its exploration leases in either Queensland or NSW.
 EBM is to refund a portion of the demonstration project cost to Red Sky from the sale of its
share of production.
 Should Red Sky determine that the project has been successful, the Company has the right to
deploy the technology throughout any of its acreage via a sub‐license.
 EBM would be entitled to a 25% farm‐in interest and receive a production royalty from
permits where BME technology is applied
The deal is conditional upon Red Sky shareholder and regulatory approval should it be required.
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Red Sky Energy Ltd
ASX Code: ROG
The Technology
BME accelerates the natural biogenic process that produces methane known as coal seam gas.
Biogenic methane accounts for in excess of 20% of the total methane reserves on earth. Major
sources include the majority of coal seam gas in the Surat Basin in Queensland and the Powder River
Basin in Wyoming, United States of America.
BME has been demonstrated to produce methane in both bench scale trials (lignite and black coal)
and field tests (black coal) in the Powder River Basin located in the USA. Red Sky believes the low
rank Cretaceous age coals within its exploration leases in northern NSW and southern Queensland
are well suited for the application of BME technology.
BME works by artificially stimulating the micro‐organisms called methanogens that break down the
coal structure and produce methane as a by product. BME technology works best on lignite (brown
coal), low rank black coals and oil shale. This is because of their high content of volatile hydrocarbon
compounds and hydrogen, which if all converted to methane would yield gas quantities in the order
of ten times that of traditional coal seam gas.
Red Sky and BME
Red Sky Executive Director Mr Murray Durham said, ?Red Sky is committed to investigating
commercialisation options for its extensive exploration portfolio. The BME technology looks very
prospective, should be well suited for application to Red Sky's acreage and has the potential to
significantly enhance the gas production capacity of our coals.?
Ends