Purchase of Additional Oil Rights and Update of China Operations
Friday, 12 November 2010
Vancouver, British Columbia, November 12, 2010 – Petromin Resources Ltd. (“Petromin” or, the “Company”) is pleased to announce that it has obtained additional oil rights on its Morningside Prospect in Central Alberta.
Petromin acquired a fifty percent working interest in the acreage (160 acres: NE23-42-28W4M) next to the Company’s two producing Glauconitic gas wells. The proposed drilling location on the new property directly offsets a producing Lower Manville oil well that has produced to date approximately 120,000 barrels of oil and one-third of a billion cubic feet of gas with initial production rates in excess of 350 barrels of oil per day. With success of this well, Petromin would anticipate drilling of additional two to three locations on the property.
In addition, the Company is pleased to provide updates on its China operations.
1. Terrawest Energy Corp. (“TWE”) Drilling Update
As reported previously, TWE 2010 drilling program has been approved and initiated. Pre-drilling road work and site preparation began in late September for the first three (3) pilot production wells. Drilling began in October.
TWE also initiated well testing at the LHG08-01 well site and recompletion equipment and personnel were onsite by late September. Well LHG08-01 was drilled to a depth of 784 meters and cased to the top of the thickest coal seam of the Jurassic Xishanyao (“J2X”) at 750 metres. The coal seam in the open hole was tested in 2008 and 2009, producing water and coalbed methane(“CBM”). The 2010 work involves a recompletion and work-over of the well and perforation of the upper J2X coal seams which have not been tested to date.
Well testing will also be initiated at LHG 08-03 and then at the new pilot wells as they are completed.
The 2010 program calls for the drilling of up to ten (10) pilot production wells and drilling will occur sequentially extending to 2011. The wells are planned to produce CBM from target coal seams as well as natural gas from shale.
TWE holds the first and to date only fully approved CBM Production Sharing Contract (“PSC”) in Xinjiang which is considered to be among the most attractive CBM exploration areas in the world based on known coal resources and regional economic development plans of the central government of China. The 2010 program is the first CBM pilot production under a PSC in western China.
Under the terms of the PSC, TWE has the right to explore for, develop, produce and sell CBM or liquid hydrocarbons extracted from CBM. CBM is defined in the PSC as gas stored in certain named geological formations of Jurassic age to a depth of 1,500 meters.
2. Enhanced CBM (“ECBM”) Pilot Project Update
Further to the Company’s November 24, 2009 news release, CO2 injection and ECBM pilot production test at Well SX-001 was successfully completed. Reservoir data collection and analysis followed the testing and reservoir simulation work will follow the analysis. Full test results and indications of the plan for the next step will be released after the project joint management meeting, which is scheduled to be held in Vancouver in December, 2010.
The CO2 injection is the first ever such activity in the People’s Republic of China to be undertaken under leadership of state-owned and private enterprises while being assisted by support and funding from the Canadian and Chinese governments.
As reported on the Company’s December 7, 2009 news release, the ECBM Pilot Project has received matching funding support from the Canadian government under the auspices of the Asia-Pacific Partnership on Clean Development and Climate. The Pilot Project is an international cooperative venture between Petromin, Enviro Energy International Holdings Limited (“Enviro Energy”) and China United Coalbed Methane Corp., Ltd.(“CUCBM”). Pursuant to a cooperative joint venture agreement, CUCBM, as operator, holds 60% participating interest in the project, while the Company and Enviro Energy each holds a 20% participating interest. The parties will jointly retain the intellectual property developed during the pilot campaign.
About Petromin Resources Ltd.
Petromin is progressive international petroleum and natural gas exploration and production Company listed Tier 1 on the TSX Venture Exchange. Petromin was ranked 24th of the Top 100 Fastest Growing Companies in BC by Business in Vancouver in 2009 based on a 704% revenue increase over the past 4 years.