South Wales - Coal Seam Methane (Eden earning 50% in 430km2 licences)
Second well:
- Permeability testing commences this week on up to 18 coal seams (individually up to 4 metres thick)
- Well completed at 810m
- Encouraging preliminary in situ total gas content results (up to 11.4m3/t dry ash-free gas content) with average of 8.4m3/t
First well:
- Good gas contents and permeabilities from first well, with average gas compositions very close to typical Australian pipeline specifications for natural gas and permeabilities equivalent to or better than similar areas in Australia.
- Gas content increasing steadily with depth from a low of about 1 cubic metre per tonne (m3/t) at 100m to over 9m3/t at 400m.
- Encouraging permeability with the shallower zone being highly permeable (44mD) and the deeper zone being moderately permeable (18mD).
Third well:
- Third drill site ( Pencoed 1) ready for immediate start
- Immediately adjacent to potential major industrial customer ( Rockwool)
• Comprehensive digital data base of coal seams from former British Coal’s historical records.
• Immediate potential access to industrial customers, natural gas pipeline grid and electricity grid with gas prices increasing in the UK as the market globalises. Net margins are likely to be comparable with those obtainable by coal seam methane producers supplying proposed LNG projects in Australia given proximity to gas grid and avoidance of liquefaction costs.
Second well completed: Llangeinor 1
The permeability testing on the coal seams in Llangeinor, the second well to be drilled within Eden’s south Wales coal seam methane, coalmine methane and natural gas licences, is scheduled to commence this week and is likely to take approximately 3-4 weeks.
Llangeinor 1 has been completed to 810m depth. The well is centrally located in PEDL100, about 10km east of the first well drilled at Port Talbot.
The core recovery from Llangeinor 1 was excellent and high quality technical data has been collected. The main coal measures commenced at around 570m depth, although other potentially interesting coal seams were intersected higher up in the hole. The thickest seams were 3m and 4m respectively.
A total of 18 seams thicker than 0.25m were tested for gas content, and selected samples also tested for gas composition by Ticora Geosciences, Inc. Preliminary results show the total in situ gas content slowly decreasing with depth from a high of about 11.4 cubic metres per tonne (m3/t) at 534m to 8.4m3/t in the deepest seam tested.
Final gas content results are awaited, as well as results of isotherm tests on selected samples. These tests estimate the relative gas saturation of the seams and gas composition analysis.
First well completed and now tested (Aberavon 1)
Eden’s first coal bed methane well in the south Wales licence areas, Aberavon 1, was drilled at Port Talbot, 3km from the Corus steelworks, and completed in September 2007.
The final gas content and permeability results are very encouraging.
Aberavon 1 reached a total depth of 428.91m, and intersected a total of 12 seams ranging in drilled thickness between 0.25m and 2.35m for an aggregate drilled thickness of 15.81m.
Core recoveries were excellent, and high quality samples were obtained from all of the coal seams.
The hole encountered substantial drilling problems, with very poor ground conditions and could not be continued to the base of the coal measures sequence where thicker and gassier seams were expected. The current interpretation shows that only about half of the coal measures were intersected at Port Talbot.
All of the seams thicker than 0.25m were tested for gas content, and selected samples also tested for composition by Ticora Geosciences, Inc. Final gas content results show the gas content increasing steadily with depth from a low of about 1 cubic metre per tonne (m3/t) at 100m to over 9m3/t at 400m.
Gas composition analysis results, detailed below, were very close to typical Australian pipeline specifications for natural gas and immediately suitable for use in gas powered electricity generation.
- average methane contents were greater than 94%
- a small but significant content of ethane and heavier hydrocarbons (1.6%) and 1.7% carbon dioxide and 2.6% nitrogen (which is very close to typical Australian pipeline specifications for natural gas and immediately suitable for use in gas powered electricity generation).
Encouraging permeability was encountered in the two seam intervals, 93m to 115m (1.5m net coal) and 231m to 250m (1.86m net coal), which were tested for permeability with the shallower zone being highly permeable (44mD) and the deeper zone was moderate (18mD).
Persistent collapse/bridging of the hole at around 250m unfortunately would not allow for the seams deeper in the hole to be tested.
The permeability results are very encouraging, being the equivalent or better than similar areas in Australia. For example, in the Sydney and Bowen Basins, permeabilities at similar depths, range from <1mD up to the order of 500mD. Producing seams of similar depths and thicknesses from the Moranbah Coal Measures of the Bowen Basin have permeabilities ranging from 3mD to 300mD, and gas contents of 6-9m3/t.
Despite being unable to undertake permeability tests on deeper zones in Aberavon 1, the starting values in this hole suggest deeper seams will have permeabilities suitable for commercial CSM development.
In the Australian context, where gas prices are much lower and infrastructure development costs, such as pipelines, are much higher, permeability values down to 5mD are considered attractive for options such as surface to inseam development and/or fraccing.
Ongoing drilling
The third well to be drilled will be Pencoed 1, commencing shortly. This well is located on the eastern side of PEDL100, adjacent to the Rockwool insulation plant, a major consumer of gas. This area is considered very prospective for a development of a conventional CSM field – due to a large area of relatively flat open fields and good coal thicknesses at appropriate depths. This well is expected to take 4-8 weeks to drill and complete.
Background
Eden Energy Limited (“Eden”) has a farm-in agreement with Coastal Oil and Gas Limited, to explore the coal seam gas potential in Petroleum Exploration and Development Licences 100, 148, and 149 in South Wales (total area 430Km2). The program will also include the exploration for methane in abandoned mine workings, the running of a seismic programand the drilling of a deep well targeting Devonian sandstones.
Eden is nearing the end of its farm-in obligations, and aims to have completed this obligation at the end of the current three well drilling program.
Gas prices in Britain remain high, and any commercial gas discoveries will find a ready market either into existing pipeline grids or direct into local industry.
The three PEDLs which are the subject of the Eden farm-in cover more than 20% of the South Wales coal bearing basin. Only approximately 20% of the coal in the Basin has been mined, from the late 1850s until the 1980s.
The coal seams are known to be gassy, and gas outbursts have been recorded from seams in a number of collieries.
Many potential customers are located within the South Wales Project area. Further, an electricity grid and natural gas pipelines cross the licence area.
A comprehensive digital data base of the coal seam data for the entire licence areas has been compiled by our UK farm-in partner from historical British Coal records which gives the project a great advantage for efficient and economic planning, testing and development of a coal seam gas field.
Coupled with significantly higher gas prices than Australia, proximity to markets, and the potential for a significant gas resource, this project has potential significant value to Eden.