Riverside Energy Ltd

Transcription

1 Riverside Energy Ltd presenter Dr John Bishop executive chairman 16 th August, 2012 Disclaimer No representation or warranty is made as to the accuracy, completeness or reliability of the information contained herein. Any forward-looking information in this presentation has been prepared on the basis of a number of assumptions which may prove to be incorrect. This presentation should not be relied upon as a recommendation or forecast by Riverside Energy Ltd.

2 Summary Riverside Energy: Has large resources of coal in the UK suitable for both conventional mining and exploitation by underground coal gasification (UCG) Provides exposure to worldwide demand for thermal and coking coals Is well placed to help fill the UK s Gas Gap (now >50%) and increasing demand for energy security The Opportunity: To take significant equity interest through early seed funding

3 Why? An exciting time for energy: growth and change The final solution for sustainable power will be: nuclear fusion?, geothermal?,? Hydrocarbons will always be needed for chemical feedstocks, if not for liquid fuels Gas will be a decades-long source of energy (largest growth) What are the requirements for a successful source of energy? What energy sources fit those criteria? UCG World energy consumption per capita (kg of oil equiv.)

4 Why UCG? Coal is the world s most plentiful source of energy Making gas from coal is long-established ( town gas ) UCG gas ( syngas ) is all in-situ and reduces carbon output by 50% to 100%. UCG has come of age with directional drilling Syngas is a versatile gas and can be used for: Electricity generation Transport fuels Fertilisers Hydrogen (cheapest production) Other chemical feedstocks Oil Gas Coal Global Fossil Fuel Resources (IEA) (pre-shale gas)

5 Why Europe? Europe has a strong desire for energy security and energy selfsufficiency Europe has high energy costs and a stable, favourable regulatory regime with a 'coal culture Numerous offtake opportunities in close proximity to production The UK has near-zero acquisition costs and minimal royalties, plus a common language and history UCG has a long history in the UK

6 Why Riverside? The Projects: very large resources including the Firth of Forth: One of the best UCG sites in Europe The People: engineers and scientists experienced in UCG The Directors: experienced in creating and running resource companies A Plan B : excellent resources of thermal and coking coals suitable for conventional mining

7 UCG Explained The same process used to make town gas (at the Gas Works) is carried out within the coal seam. Simplified: C + H 2 O = H 2 + CO (syngas) Two boreholes are drilled into the coal seam using directional drilling technology: one injection hole and one production hole A small portion of the coal is burned to provide the heat for the chemical reaction Air / oxygen / steam down the injection hole Syngas up the production hole Typical syngas composition: H 2 30%, CH 4 15%, CO 15%, CO 2 40% Linc Energy

8 UCG Process Hydrogen-fired power station: zero emissions Gas to liquids plant Syngas clean up, CO 2 separation & sequestration

9 UCG is a safe process Environmentally Safe Stay away from aquifers, go deep and beneath sealing strata. Maintain a negative pressure in the gasification chamber. The gas is then contained and flows up the production well. Subsidence minimised or eliminated by good operational design.

10 UCG v s CSG* UCG CSG Energy Source Coal Gas in Coal Gas Produced Syngas Methane Energy Extracted % <5% De-watering required No Yes Fraccing No Often Subsidence Possibly No Borehole Collar Density Low High * Coal Seam Gas, also referred to as Coal Bed Methane (CBM)

11 CSG/Coal/UCG Energy Efficiencies CSG Advanced Coal-Fired UCG after Eskom (2010)

12 Global UCG Projects Linc Energy: Wyoming, China, UK Previous EU Pilot Riverside: UK Angren: 50 yrs cont. operation Swan Hills: 1400m Gasifying ENN: 2.5 yrs 5MW operation LNC & CNX pilot plants Announced or planned Carbon Energy: Chile, Turkey, USA Majuba project operating for 4 yrs NZ Gov t project u/way

13 Corporate Riverside Energy Ltd: A pre-ipo Australian Underground Coal Gasification Company with UK subsidiaries holding the licences (REL: 100%) Seed capital raised to date: $2M Issued capital: 59.2M shares / 53 shareholders Experienced, technical Board of Directors: o Dr John Bishop, Executive Chairman o Doug Goodall, Non-Executive Director o Dr Roger Lewis, Non-Executive Director Dr John Bishop, e: j.bishop@riversideenergy.com.au, m: Level 8, 350 Collins St, Melbourne, Australia, 3000

14 Riverside s Projects Whitehaven Firth of Forth Liverpool Bay Amble * Six granted UCG licences + two applications, REL: 100% * Inserts show licence boundaries & seismic coverage * Areas chosen for previous mining & good infrastructure * CCS / EOR potential in North & Irish Sea oil/gas fields * Negotiating for onshore licences Thames Estuary

15 Firth of Forth: the best site Described by REL s consultants as arguably the best UCG project in Europe Approx 1 billion tonnes of coal estimated Potential for CCS / EOR via existing infrastructure to North Sea oil & gas fields Potential for extensive underlying oil shales Extensive offshore workings beneath the Firth of Forth. REL s licences in solid red. REL model of the Lower Coal Measures in the Firth of Forth

16 The Technical Team Dr John Bishop, FAICD; CEO. John is a geophysicist by training with more than 30 years involvement in the resources industry. He was the founding Managing Director of Carbine Tungsten Ltd (ASX: CNQ) and founding Chairman of KUTh Energy Ltd (ASX: KEN). General Manager. The GM is a mechanical engineer with 17 years experience, mostly in the power generation industry; including 4 years as manager of a UCG project, taking it from concept to commissioning. He is currently completing a large power station renewal and will be available in early Dr John Rippon, Consultant. John is a deep mine geologist with more than 40 years experience in the UK coal industry. He is a UCG Consultant with the Institute of Petroleum Engineering (IPE) at Heriot-Watt University and has been involved with several UCG studies across the UK. Prof. Brian Smart, FREng, FRSE, FIMMM, CEng; Advisor. Brian is a previous Head of the IPE and Vice Principal at Heriot-Watt University. Brian has introduced British engineering degrees to several countries and has close connections to China, Middle East, SE Asia and Russia. He has a special interest in UCG and is a co-author of the 2006 study into the feasibility of UCG under the Firth of Forth.

17 Riverside s Strategy 1. Acquire a portfolio of large-tonnage UCG permits, in stable regions with high energy costs and a strong desire for energy security: DONE 2. Acquire experienced team of engineers to design, build and operate syngas plant: READY 3. Locate site for first operation and obtain offtaker agreements: UNDERWAY 4. Procure sufficient funding for pilot gas flaring: NEXT STEP* 5. Listing planned post pilot flaring to maximise valuation * To be at least partially funded by Riverside s conventional coals

18 Supplementary Slides The FoF is well placed to provide commercial quantities of UCG gas for power stations and industrial complexes located along its shoreline. (DTI, 2006) Riverside s Firth of Forth UCG Project. Schematics and quotes from UK Dept of Trade and Industry 2006 report: Creating the Coalmine of the 21st Century, The Feasibility of UCG under the Firth of Forth

19 Coal for Conventional Mining (1) Amble thermal coal Multiple shallow seams of high calorific value thermal coal overlie the UCG targets. These seams were mined in the adjacent Ellington Mine (closed 2005), and Were extensively explored by the National Coal Board in the 1980s. Recent evaluation for Riverside suggests a net (ie, saleable) tonnage of at least 80Mt. Amble thermal coal : Riverside licence boundary in red, Ellington mine licence in purple, NCB exploration in solid blue

20 Amble thermal coal : Riverside licence boundary in red, Ellington mine licence in purple. Plus NCB exploration borehole collars (in green) and seismic lines Coal for Conventional Mining (1) Amble thermal coal Multiple shallow seams of high calorific value thermal coal overlie the UCG targets. These seams were mined in the adjacent Ellington Mine (closed 2005), and Were extensively explored by the National Coal Board in the 1980s. Recent evaluation for Riverside suggests a net (ie, saleable) tonnage of at least 80Mt.

21 Coal for Conventional Mining (2) Whitehaven coking coal At Whitehaven, seams of metallurgical coal sub-crop close to the coast and dip offshore. 900m long access drifts from 1990s operation, may allow a quick and low-cost pre-mining development Excellent infrastructure including working railway within 100m of planned portal Total tonnage is estimated at ~1Bt with a significant proportion suitable for mining. Whitehaven coking coal : two offshore and one onshore licences. Showing some borehole collars (in blue) and seismic lines

22 UCG Capital Requirements 1. A pilot gas flaring, proof-of-concept, operation is estimated to cost ~ 20m and take up to 18 months to complete. The information obtained will be used to prepare a BFS for a commercial operation. 2. A gas cleaning plant providing syngas to end-users will cost ~ 100m. With offtake agreements, up to 50% of this amount can be debt funded with the balance raised at IPO.

23 UCG Rough Financials Assume an energy content of 25GJ/t (eg, FoF); 75% recovery and 75% efficiency to convert to Syngas. For a mining rate of 1Mtpa, and a discounted UK gas price of 5 per GJ: Gross revenue is 70Mpa, (Capex ~ 100M) Assuming an overall life of mine cost (ie capex+opex) of 1 per GJ (LLNL quote US$1.36 per GJ and Carbon Energy, AU$1.25 per GJ), then: Net Revenue is ~ 56M for every 1Mt of coal gasified Note: most companies are planning for an on-site value-adding activity: eg, gas-to-liquids (Linc); electricity generation (Carbon); fertiliser (Liberty) (Syngas from 1Mtpa (gross) will power ~200MW power station)