About to complete the assignment of 4507 & 4510 to WVE
EL 4507 and EL 4510 (100% interest)
Coal Seam Gas in Brown Coals
The Company holds three licence areas known to contain in excess of 11 billion tonnes of shallow Tertiary brown coal in an area abutting the eastern outskirts of Melbourne. The Melbourne (Parwan) Trough deposit of Mid-Miocene brown coal, extending from Bacchus Marsh to Altona, is almost wholly within EL 4507 and EL 4392, and the largest Australian accumulation of brown coal outside the Gippsland Basin. The less extensive Anglesea syncline deposit of Eocene brown coals is largely contained in EL 4510. Both deposits are prospective for late stage biogenic coal seam gas, based on an analogy with gas production from coals of similar rank, thickness, and hydrologic setting, in the Powder River Basin in Wyoming and Montana, USA.
Biogenic coal seam gas is formed through natural bacterial activity associated with meteoric water recharge of thermally immature (low rank) coals. No structural or stratigraphic trapping is required for coal seam gas, as the gas is adsorbed onto the coal grain surfaces and trapped by water pressure; the coal effectively acts as source, reservoir and seal for the gas. Provided the target coals have the requisite level of gas saturation, the "bottleneck" in the development of biogenic coal seam gas (or indeed any coal seam gas) is in devising means for sustained gas production at commercially viable rates. Gas productivity is established by dewatering the coal and hence lowering reservoir pressure in a limited area through extended "pilot" production tests of groups of closely spaced wells.
The Company has previously established a five-well pilot production trial at Oak Park, in EL 4507 approximately 19 kilometres south of Bacchus Marsh and 35 kilometres west of the Melbourne CBD. At the Oak Park site, the target Maddingly coal seam is approximately 17 metres thick and buried at depths of 105 to 111 metres. The pilot configuration comprises five wells into the Maddingly coal seam, with four wells 300 metres apart surrounding a central well. Each of the wells is cased down to the top of coal and under-reamed to 12 inch diameter through the coal section.
Continuous production testing of Oak Park Pilot commenced in January 2005, with aggregate daily water production of 90 barrels. As this is the first project of its type in Australia, it is uncertain how long the wells need to be produced before the commercial significance of any gas production can be determined.
