UPDATE OF LIUHUANGGOU CBM PROJECT IN CHINA
Thursday, 01 November 2012
Resources Ltd (the "Company") is pleased to announce that TerraWest
is moving forward with exploration activities in the field at its Liuhuanggou coalbed methane
(“CBM”) project (“2012 Field Program”) in Xinjiang, The People’s Republic of China (“China”). The 2012 Field Program involves drilling,
casing and completing
wells at two key selected locations.
Drilling at well LHG12-02 is expected to begin on 2 November 2012. The well is located in the
multiple gas-bearing Jurassic Badaowan (J1B) coal seams and shale. The control well for the 2010 well was a coring drill-hole which provided core samples for testing and analysis in China and North America. Several gas-bearing targets were identified based on the sampling and analysis results.
Well LHG12-02 is located
pilot production configuration
be considered in the future. Completion of the well and any subsequent testing of target coal seams and formations will follow after evaluation of results.
Drilling at location LHG12-01 will follow in due course.
Well LHG12-01 is located in the vicinity
drilled well LHG10-01 which intersected over
of gas- bearing Jurassic Xishanyao (J2X) coal seams during the 2010 field program.
Well LHG 10-
01 was successfully tested in early 2011 and produced water and gas from coal seams over a
three-month period. The location of well LHG12-01 is such that the hydrogeology of the target coal seams can be further evaluated and tested relative to the previously drilled well.
Completion of the well and any subsequent testing of target coal seams and formations will follow after evaluation of results.
The well locations are accessible by
existing paved highways and side roads and any required side road upgrade work is currently underway using local contractors.
is expected that CBM drilling operations will run for several weeks.
Earlier field programs included geological reconnaissance
mapping, coring drill-holes, pilot production wells and testing. As previously reported, an independent third party evaluation according to reporting standard National Instrument 51-101 Standards
Disclosure for Oil and Gas Activities (NI 51-101) provided gross (100%) estimates of CBM Discovered Gas Initially in
Place contained in the target coal seams within a defined area ranging from (low) 70.00 billion cubic feet (“Bcf”) to (best) 147.43Bcf to (high) 514.07 Bcf.
Please visit the Company’s website www.petromin.ca under “Announcements”
(“Updates on the Liuhuanggou CBM Project”) for the further
according to the
Resources Management System of the
of Petroleum Engineers’ Best Estimate Original Gas in Place. This
updating evaluation covered the target coal seams outside the previously evaluated area and all other prospective formations (including shale gas) for the entire PSC (hereinafter defined) area.
As at the date hereof, the Company
holds 22.28% of the current issued common shares and preferred shares in the
capital of TWE. TWE
holds a 47% interest in and
of the Liuhuanggou CBM production sharing contract (“PSC”) located in the Junggar Basin of Xinjiang, China. China National
Petroleum Corporation (“CNPC”) holds the remaining 53% of the PSC.
The PSC is
by PetroChina Coalbed Methane
an indirect subsidiary of CNPC. The PSC covers 653 square kilometres (255 square miles) and is located adjacent to the city of Urumqi, the capital of Xinjiang Uyghur Autonomous Region, China