MC - $4.8m
SP - 3c
Shares - 160m
Options - 2.7m
Cash - $1.6m
UCG Project Update
-Baseline monitoring well scheduled for September 2012
-Drilling recommended and approved by the Department of Water
-Next step in developing the first UCG project in Western Australia
-Potential to market the Sargon Project in China
Eneabba Gas wishes to advise that it has finalised plans to drill a baseline water monitoring well on its Sargon coal tenement which is currently scheduled for September 2012.
The Company has previously drilled and defined a JORC coal resource on its Sargon tenement of 194 million tonnes1 with an in-situ energy yield of 3,037 peta joules. This resource is based on a limited exploration programme and remains undefined to the south of the tenement which provides scope for a resource upgrade following further drilling.
RPS Aquaterra has been engaged to collect the initial baseline water data as well as conduct a second suite of permeability testing of the nominated aquifers. This work will provide a further understanding of the baseline groundwater environment on the Sargon tenement so any potential changes as a result of the proposed underground coal gasification (“UCG”) pilot burn can be documented and assessed. RPS Aquaterra has previously performed detailed assessments of the hydrogeology of the Sargon project, which has confirmed the suitability of the project area for UCG. The data collected from this assessment will improve the existing knowledge and modelling of the hydrogeology of the project area.
This latest groundwater review has been recommended and approved by the Department of Water and is a crucial step to ensure that the project receives state government approval.
Following the definition of the Sargon project as suitable for UCG, the Directors are currently searching for an investor or joint venture partner to provide the technical experience and funding to develop the project into a commercial UCG operation that could potentially supply feedstock to the Company’s nearby proposed Centauri- 1 Power Station.
The Directors are aware of strategic partnerships being formed between Australian energy / UCG companies and Chinese institutions and believe there is an opportunity to combine Chinese UCG industry experience with the Company’s knowledge of the Sargon UCG project area, developed over a number of years, in order to fast track development of the Sargon project into a world class UCG project.
Moreover, Directors of Eneabba have recently been to China to investigate opportunities, including possible joint involvements for the UCG project.
The Company will continue to update the market as the project develops.
Sale of Remaining Inventory Gas Completed
The Directors of Eneabba announce that Eneabba has finalised the sale of its remaining inventory gas, previously held under the Gas Swap Agreement between Verve Energy and Eneabba.
Following the receipt of the final sale instalment expected in the next two business days, Eneabba will have received ~$800k from the progressive sale of its inventory gas under the gas sale agreement, which was executed on 13 March 2012 as previously announced to the ASX. Gas inventory was sold at a premium to the gas price available from the Gas Swap Agreement.
With the addition of the gas sale proceeds, the Company is in a solid cash position which it will continue to use to develop the Company’s UCG coal and power projects and actively pursue new opportunities in the resources and energy sector.
Further to this, the Directors of Eneabba have been working to advance and market the Company’s projects and will provide an update of activities in the coming weeks.
The seel side on ENB is really weak, any spark from these guys could see considerable SP increase.
I am still bearish about UCG in Australia.