Carbon Energy UCG Projects update. UCG Association London March 2011

Transcription

1 Carbon Energy UCG Projects update UCG Association London March 2011 Cliff Mallett Technical Director

2 Important Statements Disclaimer The information contained in this presentation is given without any liability whatsoever to Carbon Energy Ltd or any of its related entities or their respective directors or officers, and is not intended to constitute legal, tax or accounting advice or opinion. No representation or warranty, expressed or implied, is made as to the accuracy, completeness or thoroughness of the content of the information. The recipient should consult with its own legal, tax or accounting advisers as to the accuracy and application of the information contained herein and should conduct its own due diligence and other enquiries in relation to such information. The information in this presentation has not been independently verified by Carbon Energy Ltd. Carbon Energy disclaims any responsibility for any errors or omissions in such information, including the financial calculations, projections and forecasts set forth herein. No representation or warranty is made by or on behalf of Carbon Energy that any projection, forecast, calculation, forward-looking statement, assumption orestimate contained in this presentation should orwill be achieved. Please note that, in providing this presentation, Carbon Energy has not considered the objectives, financial position or needs of the recipient. The recipient should obtain and rely on its own professional advice from its tax, legal, accounting and other professional advisers in respect of the addressee s objectives, financial position or needs. This presentation does not carry any right of publication. This presentation is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by Carbon Energy. Neither this presentation nor any of its contents may be reproduced or used for any other purpose without the prior written consent of Carbon Energy. Competent Person The information in this presentation (where it relates to resources) is based on information compiled by Dr C. W. Mallett, Executive Director Carbon Energy Limited who is a member of the Australian Institute of Mining and Metallurgy. Dr Mallett has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Dr Mallett consents to the inclusion in the presentation of the matters based on his information in the form and context in which it appears. The reserve estimates used in this document were compiled by Mr Timothy Hower of MHA Petroleum Consultants, Colorado, USA, a qualified person under ASX Listing Rule Mr Hower has consented to the use of the reserve information contained within this document in the form and context in which it appears. 2

3 Carbon Energy is Building a global energy company CORE BUSINESS Converting coal into syngas underground (UCG) Generating multiple uses for syngas e.g. power generation, fertiliser production and gas-to-liquids (GTL) projects Creating global projects based on resources, markets, partnerships Active in Australia, Chile, US, Turkey, India 3

4 Carbon Energy Unique (originally) UCG Design Controlled in-panel reaction Utilising deep coal Produces Syngas for energy or feedstock 4

5 Aerial photo of CEL s Bloodwood Creek UCG site 5MW power station Monitoring wells UCG panel Underground Office & infrastructure Accommodation

6 Reactor Growth during tests Product gas to Main FLARE Vertical injection well Steam + O2 STEAM & O 2 INJECTION Phase January 2009

7 Reactor position verified BURN THROUGH of monitoring well No 6 Confirms reactor position DAY 140 late Feb 2009

8 Ground temperature BURN THROUGH of monitoring well No 6 Confirms reactor position Cross-section line

9 Temperatures around cavity in 24 mths operation >50 o C ZERO effect 60m above cavity 26.5 o C to 50 o C Greater than 100 o C 12m above cavity as reactor passed under Temperature sensor Ambient temperature ~ 26 o C ZERO effect 50m west of cavity 70 o C after 24 months In reactor wall coal seam REACTOR CAVITY <2 o C rise after 20 mths 10m east of reactor coal seam ZERO effect 50m east of cavity No effect 12m below seam Scale 30m scale

10 3D Seismic exploration RL top of seam RMS Amplitude UCG Panel Amplitude Anomaly Over UCG cavity After Peters T, Rich N, Strong S, 2010 Seismic reflection: A useful tool to assist UCG Proceedings of the Bowen Basin Geologist s Group Conference October 2010

11 Detail of 3D Seismic Survey RMS Amplitude anomaly over UCG cavity Design cavity Monitoring wells The anomaly is centered on the UCG cavity, but does not show edges precisely

12 Water Monitoring Bloodwood Creek Over 50 monitoring devices in 30 water monitoring bores within an area of less than ½ square mile Monitor: - Water Quality - Groundwater Pressure - Gas Composition - Microseismic signals - Temperature 3 monitoring layers provide security in controlling the gasification process, maintaining operational parameters and preserving groundwater quality 12

13 Queensland resources Interest in 2,000 km2 of EPC s but drilled only small part 668 Mt 450 Mt Inferred 218 Mt indicated (2m cut-off) JORC compliant coal 13

14 JORC practice Proven ore Reserves (Recovery plan) Measured mineral resource <250m <1km Indicated mineral resource 4km Cutoffs for grades and thickness Inferred mineral resource

15 Petroleum Resources Management System RESERVES Discovered petroleum In place commercial subcommercial 1P 2P 3P Proven Probable Possible Contingent resources 1C 2C 3C Other undiscovered and unrecoverable classes

16 UCG Reserves Certification Independent certification MHA Petroleum Consultants for EPC 867 and EPC 869 In accordance with Society of Petroleum Engineers (SPE) guidelines the reserves are: Area Category Gross Gas PJ Bloodwood Creek 1P Reserve (proven) 11.0 EPC 867 including 2P Reserve (proven + probable MDL 374 3P Reserve (proven + probable+ possible) Additional resources 2C (Contingent) of PJ have also been identified in both Bloodwood Creek EPC867 and Kogan EPC 869 areas

17 Key criteria- PRMS assessment Coal resource base is JORC 1P 2P 3P resource based on seams >5m 2C resource based on seams >2m Active production requirement Syngas and energy produced per tonne coal gasified Percentage of coal accessed by UCG required 1P only for existing UCG panel +2 Commercial requirement Must have offtake/sales contract Significant discount for UCG from 17300PJ insitu in coal to PRMS syngas 2P of 744PJ and 3P 1043PJ + 2C 1928PJ

18 Current Domestic Operations Kogan, Queensland 5MW Power Station (Phase 1) Commissioning of Panel 2 Commissioning of Gas Engines Electricity Generation power our site Electricity connection into local Grid Commissioning of Panel 3 25MW Power Station (Phase 2) Development Agreement already in place with Arcadia Energy Trading Power Purchase Agreement under negotiation Project planning already commenced 18

19 Power Generation Blue Gum Energy Park 3 Phase 19

20 Chile Mulpun Project Agreement with Antofagasta Minerals S.A. to jointly assess and develop a coal deposit in Mulpun (near Valdivia) Located in southern central Chile, 800km south of Santiago Focusing on Power Generation - Chilean electricity demand growing by 8% p.a. - Currently reliant on imported coal, LNG and Diesel Environmental Approval Obtained for Pilot Project 20

21 Mulpun UCG site Small remnants native forest Drill rig Water courses Mainly cleared pastoral land and exotic forestry

22 Summary CEL demonstrating leading UCG technology developed by CSIRO Pilot was endorsed after exhaustive government scrutiny Development pathway for Bloodwood Creek site Projects and partnerships being developed globally Cliff Mallett Technical Director Kogan, Queensland 22