Exploration and Development of a Low Rank,

Biogenically-Derived Coalbed Methane

Prospect, Huntly Coalfield, New Zealand

Tim A. Moore1,2,3
1 Research

Manager, Solid Energy NZ Ltd.

Chief Geologist, Arrow Global CBM
3 Senior Fellow, University of Canterbury
2

CSG Exploration in New Zealand

Some early evaluations by Ministry in 1980s
Southgas/Northgas experiences in the 1990s
Westgas developments early 2000s
Exploration of low rank coals early 2000s
Kenham/L&M Group
RDT
Solid Energy
Bridge/Westech

Page 1

Waikato Prospect
Nov. 2002:

RDT awarded PEP

Nov. 2004:

CBM Ltd. JV formed Nov. 2004

June Oct 05: Exploration phase in Huntly

Coalfield

THREE STAGE APPROACH

1. Initial basin assessment
2. Basin wide exploration
3. Appraisal wells (Pilot wells)

Location

Page 2

Expected outcomes of each stage

Initial Assessment:

Indicative gas in-place

Exploration:

Gas volume, quality &

water quality

Appraisal:

Flow rates (gas & water),

completion technologies,
permeabilities

Field Development

Stage 1: Initial Basin Analysis

Reported coal volumes

Reported gas volume

Reported gas quality

HUNTLY TW1 CH4 ISOTHERM

10

Sector

Coal (Mt)

Churchill

60

CH4

91.00

Horohoro

101

CO2

5.30

C2H4

ppm

143

Huntly West

376

Okowhao

265

Huntly East

17

Ralphs

56

Weavers
Kupakupa
Raynors

Total

1
29
0

Measure

Result

7
Gas Content (cc/g)

Rangiriri West

Gas

As An al ys ed
Cu rve aa
Dry As h Fre e

Cu rve da f
De pth AA
De pth DA F

C2H6

ppm

449.00

C3H6

ppm

C3H8

ppm

He

ppm

O2

0
0.0

N2

H2

ppm

1,048

Page 3

36554

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

Pressure (MPa)

5.0

5.5

6.0

6.5

7.0

7.5

8.0

Stage 2:
Exploration Drill Holes
Location selection based on:
Geology (seam thickness, depth)
Previous reported gas shows
Geographic spread
Access

Stage 2: Data Collection

More detail in

Reservoir delineation (rock volume)

Reservoir character (gas volume & flow)

Page 4

Stage 2: Detailed Correlations of Reservoirs

Stage 2:
Structural Re-interpretation
Structural model for:
Renown coal seam
Kupakupa coal seam
Basement

Probability assessment of faults:

Missing ~50% of faults <10m
Fault spacing 600 800 m

Page 5

Stage 2: Detailed isopach & structural models

Refinement of reservoir vol. model

Depth related to gas volume model

Stage 2: Data Collection

More detail in

Reservoir delineation (rock volume)

Reservoir character (gas volume & flow)

Page 6

Stage 2: Reservoir Character Data Types

Stage 2: Holding Capacity (Adsorption)

Page 7

Stage 2: Measured Gas Content (Desorption)

n = over 100 canisters

(The Problem: Oops!)

250C
After desorption

310C
Before Desorption [fresh]

Page 8

(Practical Result: Before and After Desorption)

Methane Adsorption Isotherms daf for Kupakupa Seam
7.0

1 m 3 = ~35 scf
6.0

Gas Volume (cc/g)

5.0
Black line =
adsorption sample
collected in the
field

4.0

3.0

SAMPLES MUST BE COLLECTED

AND ANALYZED FRESH!!!!

2.0

Red line =
collected post
desorption

Else OVER Estimation of GIP and/or

UNDER estimation of saturation

1.0

0.0
0

10

12

Pressure (MPa)
from Crosdale, Moore & Mares, in press

Stage 2: Gas Quality

Gas

basis

Mean

Stand. Dev.

CH4

98.43

1.77

CO2

1.52

1.77

C2H4

ppm

0.00

0.00

C2H6

ppm

338.72

280.38

H2

ppm

154.90

403.96

O2

0.00

0.00

N2

0.00

0.00

n = 41

Page 9

Stage 2: Origin of Gas Isotopic Analysis

NZ

from Mares & Moore, in press

Stage 2 Output: Gas in-place uncertainty

Petajoules

Page 10

Stage 2 : Gas in-place uncertainty Calculation

1.

Coal distribution

2.

Coal Thickness.
3.

A coal density of 1.35 g/cm3

4.

Estimation of average holding capacity

5.

Calculation of the % gas saturation

Thus, the preliminary gas in-place calculation is:

Gas in Place =
Coal reservoir tonnage x gas holding capacity x % saturation

Stage 2 : Gas in-place uncertainty Calculation

Area
Coal Seam Thickness
Maximum Holding Capacity
% Saturation

Page 11

Best Case
Base Case
Worse Case

Stage 2 : Gas in-place uncertainty Calculation

Stage 2 : Gas in-place uncertainty Calculation

Page 12

Stage 2 : Gas in-place uncertainty Calculation

Stage 2: Gas flow modelling - Scenarios

Page 13

Stage 2: Water flow modelling - Scenarios

Stage 2: Outcome Next Stage?

Stage 2: Exploration results

Gas in-place good (25 200 PJ)
Gas quality great (98% methane)
Gas flows good, 2-5 PJ/yr
Water quality good

Stage 3: Appraisal Well Drilling

Five closely spaced wells (~450m)
Test permeability (reservoir character)
Determine completion methodology
Establish gas flow profiles

Page 14

Administration

CSG Organisational Chart

Procurement
Officer

Financial
Modelling

Andrew Melville

Pete Simpson

Accounting
Tim Bishell

Legal Services
Chris Ford

Marketing/
Commercialisation
Andy Matheson

Communications
Anne Beex

CSG Project
Manager

Appraisal Well Operation

Tim A. Moore

Site Manager

CSG Drilling
Supervisor

Jaco Fourier

Tom Bowman

Drilling
Contractors

Stimulation
Contractors

All Site operations

H&S

CSG Geologist
Grant Gillard

Geophysical
Services
Weatherfords

Coal/Gas
Quality
Services
CRL

Desorption
Services
CRL

Environmental
Manager

Reservoir
Engineer

Reuben Mills

Sadiq Zarrouk

Water Quality
Services/
Consents
Nick Corlis KML

Geological
Reservoir data
Tennille Mares
UoC

Engineering
Reservoir data
TBA
UoA

Hydrogeological
Data
Cath Moore LV

Stage 3: Appraisal Wells

Groover-1

Baco-1
Purchase of five sets of pumps, transducers and
various casing sizes for five wells to over 450 m
Site four wells on a 400m box grid with one well in
the centre (total wells 5)

Jasper-1
Kaiser-1
Jade-1
Mimi-1

Drill the first four wells (Baco -1, Mimi -1, Jade -1
and Jasper -1) down to the upper target reservoir
(Renown seam) with barefoot completions
Drill one well (Groover -1) directly the second
target reservoir (Kupakupa seam), fully cased to
bottom of hole, perforated in reservoir area and
water enhancements conducted.
Three cores of the Renown were taken for
desorption, adsorption, gas quality, gas isotopes
and coal character (a total of 31 samples).
Water stimulations (conducted by Halliburton) on
the Jade -1 and Baco -1 wells which were
completed in the Renown
Confidential - SENZ

Page 15

Appraisal Wells
Groover-1

Baco-1
Production testing of Mimi -1 and Jade -1 ongoing
Commission feasibility study of gas pipelines to
market

Jasper-1

Commission marketing study for options of initial

gas take

Kaiser-1
Jade-1
Mimi-1

Extensive water testing of reservoir water (all

samples show compliance)
No Health & Safety or Environmental incidents
throughout the Appraisal well programme

Confidential - SENZ

Well Design: Jasper-1

Page 16

Pumps, Transducers & Monitors

Gas to Surface

Page 17

Gas to Surface

Summary
Exploration phase successful:
Reservoir & gas data good
Appraisal phase underway:
Drilling Aug Sept 06
Testing of Renown for 4-7 months
Testing of the Kupakupa 4-7 months
Initial production results promising
Delineation of best completion design
Decision to go forward:
By December 07
Commercial development of gas:
Possibly by Dec 08

Confidential - SENZ

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