The CSM Thread! (Coal Seam Methane)

[Col Lector]

Thanks Grace. Been wondering about Matthews...some really astute buying.Not mentioned in the BS article is that they also hold over 12%of BPT worth some $180 mill.
Emailed Kohler with these details.

 

[rogue_investor]

Col, Col,

I like the look of both OIP and BLU..own them both. Both good location and potential reserves. OIP has cash.. was a disappointing first Well but more to come and at this price have upside.

Have owned SXP and AOE and sold at profit.. would have been my favs if hadn't sold so cheap

Definite fav is now BOW. They have proven CSG and more wells to come. Should be over $1 shortly.

great thread guys!! thanks for the list

 

[Dukey]

Dukey: CSM gas requires a reasonably specific composition / geological structure of coal; which fortunately is widespread in Queensland (and US / India / China / Pakistan etc). I think AOE has the most of it in Queenland (hence no doubt Shell's interest); and Orion the most in Au, but it is difficult to really be sure given the new reserves estimates of various companies. It is far easier to extract than UGC and is proven technology. It requires less precision than oil well drilling.

UGC has, as I understand it, less specific requirements and thus could be used in more places (ie including the same international places), but the technology is more complex. It is used overseas but really needs a few technological advances to make it more efficient and less environmentally unfriendly (hence Mee / Cxy / CSIRO efforts). It also requires more effort to lead to production.

There is, from a government report I read about 2002 - 2004, about 100,000 pj of suitable coal for both in Au (and probably far more 1, 2 and 3 p since then) so both will have sufficient reserves for many many years.

Not sure of how effective trying to use ex CSM coal for UCG is. I would be interested in any reply.

I disclose holdings in AOE and CXY.

thanks james - interesting stuff.

..... when you say Orion - do you mean Origin - ?? don't know of Orion and can't find em in a search!

 

[Muschu]

Hi
I suspect the question which follows is too simplistic an approach to the topic. Please tell me if this is the case.

Is it possible to rank the major CSM players in Australia in terms of:
- Tenemant / acreage size;
- Level of proven and probable accessible reserves; and
- Suitability of coal for CSM extraction?

As a retiree I am less interested in more speculative stocks. That is, I'd rather invest in a more estabished CSM company which is likely to experience moderate growth than a more exploratory company which might enjoy more spectacular growth - or loss.

My impression is that ORG, AOE and QGC [STO?] might best suit my situation.

Comments, even if I am way off beam, would be appreciated.

Thanks

Rick

 

[nioka]

Hi
As a retiree I am less interested in more speculative stocks. That is, I'd rather invest in a more estabished CSM company which is likely to experience moderate growth than a more exploratory company which might enjoy more spectacular growth - or loss.

My impression is that ORG, AOE and QGC [STO?] might best suit my situation.

Comments, even if I am way off beam, would be appreciated.

Thanks

Rick

As a retiree and not looking too far ahead at all I am more interested in looking towards the more speculative stocks for csm. I made a good gain on buying and selling ORG and AOE, particularly AOE and I still hold some AOE. I doubt if I will make the same profit looking forward by holding AOE as I will if I can find the next AOE.

 

[Dukey]

Hi
I suspect the question which follows is too simplistic an approach to the topic. Please tell me if this is the case.

Is it possible to rank the major CSM players in Australia in terms of:
- Tenemant / acreage size;
- Level of proven and probable accessible reserves; and
- Suitability of coal for CSM extraction?

As a retiree I am less interested in more speculative stocks. That is, I'd rather invest in a more estabished CSM company which is likely to experience moderate growth than a more exploratory company which might enjoy more spectacular growth - or loss.

My impression is that ORG, AOE and QGC [STO?] might best suit my situation.

Comments, even if I am way off beam, would be appreciated.

Thanks

Rick

- I'm interested in both speculative up & comers and established players - cause I don't want all my dosh on speculators.
Established players: for me QGC started out as a speculator at <30c but it's now a top performing, top (mid-top??) tier CSG player. Having come back from $6 to around $5 it might be good value and if I didn't already have plenty (>50 of my portfolio) I'd be thinking about getting some. BUT that doesn't mean it won't come down a bit more before it goes up!!
I havn't investigated STO much - but I'm going to. Their news about NSW CSG could see them charging along for a while.
AOE - I have some and wish I had more. Has doubled in the last 2 mnths though.

To compare companies - check out the company presentations on company websites. from memory a presentation on the MEL website has some comparative tables - but may not include STO or ORG. - not sure.
i think its here : http://www.metgasco.com.au/docs/601562.pdf

... EDIT - sorry not THAT one - THIS one!! NOTE - the figures are not current - comparative table near the end. http://www.metgasco.com.au/docs/552986.pdf

 

[Muschu]

Many thanks Nioka and Dukey.
Yes, the website gave comparitive tables - thanks - and did not include ORG or STO.
The tables indicated with respect to the companies listed that QGC, AOE and SHG have the biggest 1P and 2P reserves by a big margin - especially the first 2 of these companies.
Any further info on where
- ORG and STO fit into the picture; and
- the appropriateness [type of coal] and accessibilty of the reserves
would be welcome.
Again, the comments already offered are greatly appreciated.
Rick

 

[Dukey]

Many thanks Nioka and Dukey.
Yes, the website gave comparitive tables - thanks - and did not include ORG or STO.
The tables indicated with respect to the companies listed that QGC, AOE and SHG have the biggest 1P and 2P reserves by a big margin - especially the first 2 of these companies.
Any further info on where
- ORG and STO fit into the picture; and
- the appropriateness [type of coal] and accessibilty of the reserves
would be welcome.
Again, the comments already offered are greatly appreciated.
Rick

There is another table in a recent announcement by BLU - Blue energy (see my post in the BLU thread) - giving tenement areas - as opposed to p, pp, ppp resources - surprisingly QGC has low acreage but v. high quality tenements. (BU has big tenement areas, but unproven quality).
STO and ORG both have bigger acreages and reserves (I think) than AOE or QGC or any one else. Though the partnerships/farm-ins are hard to work out.
I think QGC have charged ahead bec. they hit the sweet spot in their tenements and have progressed very quickly to market - smart deals etc. Eventually I would expect them to go hunting for more area - which may have been evident in the tilt at ORG by BG (QGC's new partner).
... so where will they go hunting next??? a question we would all like to know the answer to!!!

 

[Muschu]

There is another table in a recent announcement by BLU - Blue energy (see my post in the BLU thread) - giving tenement areas - as opposed to p, pp, ppp resources - surprisingly QGC has low acreage but v. high quality tenements. (BU has big tenement areas, but unproven quality).
STO and ORG both have bigger acreages and reserves (I think) than AOE or QGC or any one else. Though the partnerships/farm-ins are hard to work out.
I think QGC have charged ahead bec. they hit the sweet spot in their tenements and have progressed very quickly to market - smart deals etc. Eventually I would expect them to go hunting for more area - which may have been evident in the tilt at ORG by BG (QGC's new partner).
... so where will they go hunting next??? a question we would all like to know the answer to!!!

Aahhh.. I just typed an answer to this and hit delete instead of submit!
Thanks Dukey - I checked this other link. From that [where again STO and ORG get little mention] QGL has the largest market cap and AOE the largest area.
How to choose?
QGL for smarter management?
AOE for the potential of the area they control?
STO for diversity?
Or buy 10 shares of each and go fishing?

Thought: Have WPL any prospect / opportunity of getting into CSM? If it's an area of such growth are they going to leave it aside?

Thanks again.
Rick

 

[Dukey]

Aahhh.. I just typed an answer to this and hit delete instead of submit!
Thanks Dukey - I checked this other link. From that [where again STO and ORG get little mention] QGL has the largest market cap and AOE the largest area.
How to choose?
QGL for smarter management?
AOE for the potential of the area they control?
STO for diversity?
Or buy 10 shares of each and go fishing?

Thought: Have WPL any prospect / opportunity of getting into CSM? If it's an area of such growth are they going to leave it aside?

Thanks again.
Rick

Just realised I got the ASX code wrong for Blue energy - its BUL (not BLU - thats someone else).

- It's a tough choice - and I can't recommend anything cause we can't do that here and don't really know your situation....
but I like fishing (though the fish don't seem to like me much) - I'm trying to spread my risk over more CSG shares plus conv gas; oil; iron; ... trouble is I'm loath to sell anything.
& of course they could all plummet for some god-forsaken
unknowable reason and I'll buggered ...but I guess I won't be alone.
------------------
... I hate that - when you lose a post before posting ...

Holding: QGC, PES; AOE; BUL; CXYO; SXPO; of the coal seamers.

Re woodside - dunno. it would seem to make sense, but maybe they are doing quite well enough from their current assets.

-dukey

 

[Eddyl]

If yoyour risk appetitie is quite conservative but you want to get into the CSG industry, I would suggest QGC.
If you are buying a company purely on acerage, it is by nature alot more speculative. Any company could have huge tennements, with no provable resources. QGC has excellent acerage in the surat valley. Furthermore the ability to convert resources into contracts is another large consideration. You only have to look at the number of proved up tennements for certain resources which are closed because mining them is too expensive relative to their price.

I disclose holdings in QGC.

 

[Jimminy]

Hi
I'd rather invest in a more estabished CSM company which is likely to experience moderate growth than a more exploratory company which might enjoy more spectacular growth - or loss.

My impression is that ORG, AOE and QGC [STO?] might best suit my situation.

I think you've answered your self here.

Origin and Santos are the two first movers on CSM.

QGC and Arrow are the up and comers.

The rest have high hopes but are trailing and it is difficult to say which will be more successful than another.

But consolidation will be the next phase in the csm sector over the next 12 months. It has already begun.

I have my money in the up and comers based on their acreage. Hence I have alot tied up in ESG and BUL.

cheers.

 

[agro]

Col, Col,

I like the look of both OIP and BLU..own them both. Both good location and potential reserves. OIP has cash.. was a disappointing first Well but more to come and at this price have upside.

Have owned SXP and AOE and sold at profit.. would have been my favs if hadn't sold so cheap

Definite fav is now BOW. They have proven CSG and more wells to come. Should be over $1 shortly.

great thread guys!! thanks for the list

don't you mean BUL - Blue Energy?

i am holding this one too and think it has real potential

reason being - location as you said, and strategically next to some big names

have a look at their presentation..

 

[redwynne]

Im interested in this type of stock and found this thread interesting to read. Goes to show I dont know much about much!! Im still a newbie when it comes to stocks but willing to learn.

I would like to invest in a share or two but was only wanting to spend a small amount of money (is a thousand or two small!?). I basically want to invest for my kids and forget about them (the shares that is not the kids )

I have been keeping an eye on LNC and ICN ever since I became interested in this area, which is only very recently. Can anyone give me some information about these or other CSM related shares so that I can be in a better position to decide where to invest.

Im not sure if I want shares <$1 or a few dollars so any feedback would be welcome!

Thanks

EDIT: Have I missed this boat?

 

[grace]

This was a hint in today's Daily Reckoning. Any ideas who the company might be? A drilling company perhaps? A private company in Toowoomba has something like 58 drill rigs, but is not listed on the ASX (and it's not exactly on the coast!).

A small town on Queensland’s coast, near the state’s massive coal basin, will soon become the backbone of the coal-seam gas industry.

Tens of thousands of coal gas wells are in the planning stages and one Aussie company is poised to profit from all of this drilling.

 

[grace]

Alan Kohler's 2P or not 2P is worth a read. Also of note is OZ Minerals intention to get involved in coal seam gas in Queensland. With $2billion in the bank, who is left for them to become friends with?

http://www.businessspectator.com.au/bs.nsf/Article/2P-or-not-2P-FR4PR?OpenDocument

OZ Minerals cashed up, eyes energy prospects
Kate Haycock
Wednesday, 18 June 2008

THE reborn OZ Minerals could have around $A4 billion in cash and debt to spend on empire building, and is looking for energy projects such as coal seam gas.

News reports today have suggested the Oxiana and Zinifex union – which has adopted the patriotic name of OZ Minerals, to be ratified by a shareholder meeting later this month – could be looking to spend around $A4 billion on acquisitions.

Current Zinifex chief executive and soon-to-be OZ chief Andrew Michelmore told the Australian Financial Review the company could potentially add $3 billion in debt to current cash reserves of around $1.2 billion.

These funds could go towards projects in Australia and around the world.

Michelmore also suggested the company could be looking at coal seam gas assets in Queensland or other coal opportunities overseas, according to a report in the Australian.

 

[grace]

Thought I would post this information from Richard Cottee (MD Queensland Gas) about what to look for when investing in the industry.

1. Gas content - need to be 3 cubic metres per tonne or higher (I think QGC range from 3 - 9 on their drilling).

2. Permeability - measured in Millidarcies. Average is 50 (now I didn't read that in his document, I seem to think that was average of commercial wells). Richard mentions 10.

3. Gas Saturation - the higher the better obviously. High 90%'s is good.

4. Coal depths - generally 200m to 800m depth for coal seam gas. Gas can be up to 1000m, but must be highly permeable at these depths. eg ESG are deep, up to 1000m, but are higly permeable, and do have seams shallower on the way down.

5. Coal seam thickness - one would think the thicker the better. QGC and PES are finding good thickness, some 25 - 30 metres of seams. However, if it is thick, but not permeable, one can get more gas out of thinner, but more permeable. (QGC and PES drills are highly permeable so far)

6. Type of coal - eg coking coal is high in gas, however, as it has very low permeability, it cannot be extracted in most cases. Brown coals may be better for coal seam gas as more permeable.

7. Just because a company has gas-in-place, does not mean you can extract it. It can be mind boggling when looking at gas-in-place figures, but of no value if you can't get it up out of the ground.

Please feel free to add comments, or tell me if you think I am in error somewhere.

Here is Cottee's interview, and you'll find how to invest down the bottem section of the interview.

http://www.businessspectator.com.au...TERROGATION-Richard-Cottee-FS75W?OpenDocument

Sorry, just one more thing, unbelievably good gas flows are 1million cubic feet per day. eg Berwydale South #18 initially flowed at 2.3million cubic feet per day and stabilised around 2 million! 1 million is considered fantastic in my books though.

 

[Dukey]

Thought I would post this information from Richard Cottee (MD Queensland Gas) about what to look for when investing in the industry.

1. Gas content - need to be 3 cubic metres per tonne or higher (I think QGC range from 3 - 9 on their drilling).

2. Permeability - measured in Millidarcies. Average is 50 (now I didn't read that in his document, I seem to think that was average of commercial wells). Richard mentions 10.

3. Gas Saturation - the higher the better obviously. High 90%'s is good.

4. Coal depths - generally 200m to 800m depth for coal seam gas. Gas can be up to 1000m, but must be highly permeable at these depths. eg ESG are deep, up to 1000m, but are higly permeable, and do have seams shallower on the way down.

5. Coal seam thickness - one would think the thicker the better. QGC and PES are finding good thickness, some 25 - 30 metres of seams. However, if it is thick, but not permeable, one can get more gas out of thinner, but more permeable. (QGC and PES drills are highly permeable so far)

6. Type of coal - eg coking coal is high in gas, however, as it has very low permeability, it cannot be extracted in most cases. Brown coals may be better for coal seam gas as more permeable.

7. Just because a company has gas-in-place, does not mean you can extract it. It can be mind boggling when looking at gas-in-place figures, but of no value if you can't get it up out of the ground.

Please feel free to add comments, or tell me if you think I am in error somewhere.

Here is Cottee's interview, and you'll find how to invest down the bottem section of the interview.

http://www.businessspectator.com.au...TERROGATION-Richard-Cottee-FS75W?OpenDocument

Sorry, just one more thing, unbelievably good gas flows are 1million cubic feet per day. eg Berwydale South #18 initially flowed at 2.3million cubic feet per day and stabilised around 2 million! 1 million is considered fantastic in my books though.

Great work here Grace - as it certainly can be difficult to pull together all the necessary info to assess the up and comers.... 'nearology' will only get one so far .

The aspects posted above are why we see some disparity between a companies like ICN and BUL compared to say a PES...
Aside from being further advanced, PES has some great acreage right in the hot spots next to QGC and other proven Walloon tenements. They will be charging again soon I think.

BUL in particular has huge tenements and stated gas in place estimates - but as we saw last week they discounted large peripheral areas as 'not prospective for CSG'. And from what I can see they lack tenements right in the guts of the Walloon hot spots - they do have some around the edges which have potential...but as yet it is still 'potential'. Their recent holes are also confirming fairly thin coal seams compared to what QGC have, but as you've said , if it's permeable enough they can produce.
All in all I think BUL will have enough good 'hits' to do well.... but it may take longer. I expect their future may lay in making deals with existing producers in their best tenements when proven.
-all very interesting - like a giant 3D jigsaw puzzle!!!

-dukey

 

[grace]

2. Permeability - measured in Millidarcies. Average is 50 (now I didn't read that in his document, I seem to think that was average of commercial wells). Richard mentions 10.

Just reread, and I don't mean to mislead anyone. Richard Cottee says that anything under 10 Millidarcies, you wouldn't touch. How I typed it, it looks like average 10. No, above 10 Millidarcies needed per Richard!

Crystal clear now...

 

[Gspot]

Quoted from the The Daily Reckoning.
"But looking at the number of wells required doesn't even scratch the surface. Coal gas wells need maintenance. They need geophysical studies before drilling occurs. They need modelling, engineering design, regulatory approval and operating expertise.

The scheme will require its own pipeline system too. Santos and Queensland Gas will need 805 km of new gas pipelines for their contribution to Gladstone.

There's one firm providing all of these services, and more. This is a dynamic company that we believe has all the ingredients to be on the receiving end of the coal seam gas build up. "
Anyone know who thi company will be?