Title: Canadian Coalbed Methane Stocks: 7 Items to Know Before Trading Number Of Words: 1713 Summary: Among Canada's

leading petrogeologists, Dr. David Marchioni, cautions traders on which they must be searching for, before trading at a negative balance-hot Canadian Coalbed Methane (CBM) Stocks. You will find 7 Key Elements that comprise a effective CBM play. He alerts that some Canadian CBM plays are pricey and mature, although a lot of traders continue to be climbing onboard the bandwagon. Dr. Marchioni also names his favorite CBM stocks.

Key phrases: coal, china, coal mattress methane, gas, stocks, trading, canada, exploration, mining

Body Building: More traders are actually searching about Coalbed Methane exploration companies. Just like uranium miners were flying well underneath the radar screen at the begining of 2004, coalbed methane exploration might actually be the following hot sector later this season and then. In the past, coalbed methane gas endangered coal miners, leading to alarming deaths early in the earlier century. This is actually the fate experienced today by many people Chinese coal miners within the more compact, private coal mines. Typically, the methane gas held in coal seams was flared out, before subterranean mining started, to be able to prevent individuals explosions. Rising gas prices have lengthy since ended that practice. Today, coalbed methane companies are turning a centuries-lengthy nuisance and consequence right into a valuable resource. About 9 % of total US gas production originates from the gas present in coal seams. Because gas prices have jumped, together with the bull marketplaces present in uranium, oil, and precious and base metals, coalbed methane has come up. It's in the end a gas. But since it is outdoors the arena of the oil industry, coalbed methane, or CBM as numerous industry associates refer to it as, is known as the unconventional gas. It might be unconventional today, but because the industry keep growing by advances and bounds, on the global scale, CBM may soon achieve some respect. Please keep in mind that a couple of years back, there is hardly any cheerleading about nuclear energy. Today, positive news products are running much better than ten to 1 in support of that energy source. CBM may be the gas found in coal. It consists mainly of methane, the gas we use for warming, gas-fired electrical generation, and industrial fuel. The power source within gas is methane (chemically, it's CH4), whether or not this originates from the oil industry or from coal beds.

CBM has several strong points in the favor. The gases created from CBM fields are frequently nearly 90 % methane. Which kind of gas has more harmful particles? No, it isn?t natural, or conventional, gas you thought it may be. Frequently, CBM gas has less harmful particles compared to ?gas? created from conventional wells. CBM exploration is performed in a more shallow level, between 250 and 1000 meters, than conventional gas wells, which sometimes are drilled below 5,000 meters. CBM wells lasts a very long time ? some could produce for 4 decades or longer. Gas is produced through the compression of subterranean organic matter combined with earth?s high temps 1000's of meters below surface. Conventional gas fills the spaces between your porous reservoir rocks. The coalification process is comparable but it makes sense different: both coalbed and also the methane gas are held in the coal seams. Rather than filling the small spaces between your rocks, the coal gas is at the coal seams. Among the past problems connected with CBM exploration was the addiction to costly horizontal drilling strategies to extract the methane gas in the coal seams. Advanced fracturing techniques and breakthrough horizontal drilling techniques have elevated CBM success ratios. Consequently, an increasing number of exploration companies are going after the first bull market in CBM. Market capitalizations for most of these websites mirror similar ?early plays? we pointed out throughout our mid 2004 uranium coverage (June through October, 2004). Skillfully developed told us there will be a uranium bull market. Now, we're hearing exactly the same predictions about CBM. SEVEN TIPS BY DR. DAVID MARCHIONI We requested Dr. David Marchioni to supply our customers together with his 7 Ideas to help traders better know very well what to search for, before trading inside a CBM play. Dr. Marchioni assisted co-author the CBM textbook, An Exam of Coalbed Methane Exploration Projects in Canada, released through the Geological Survey of Canada. He's also leader of Petro-Logic Services in Calgary, whose clients have incorporated the Canadian divisions of Apache, British petroleum, BHP, Burlington, Devon, El Paso Energy, and Phillips Oil, amongst others. He is another director of Off-shore Asia China Energy and it is managing the organization?s CBM exploration enter in China. Our number of telephone and email interviews started while Dr. Marchioni sitting on the drill rig in Alberta?s foothills, the Manville region, until he finished setting out his top 7 tips, or advices, regarding how to think just like a CBM professional. 1) COAL SEAM THICKNESS It is possible to reasonable thickness of coal? You need to discover how thick the coal seams are. With thickness, you receive the regional extent from the resource. For instance, there has to be the absolute minimum thickness into which can drill a horizontal well.

2) GAS CONTENT Typically, gas submissions are expressed as cubic ft of gas per lot of coal. Find how thick it's and just how far it's spread. Then, you've got a way of measuring unit gas content. Between coal seam thickness and gas content, you are able to determine how big the resource. You need to take a look at both thickness and gas content. It?s useless to possess high gas content should you don?t have greatly coal. The examines resource per unit area. Quite simply, just how much gas is within place per acre, hectare, or square mile? In early stage from the CBM exploration, this really all you want use in evaluating its potential. 3) MATURITY Degree Of THE COAL This is actually the way of measuring happens the coal has arrived at between your mineral?s beginning as peat moss. Peat moss matures being lignite. Later, it evolves into bituminous coal, then semi-anthracite and lastly anthracite. There's a progressive maturation of coal like a geological time continuum and also the earth?s temperature, based upon depth. By calculating certain parameters, you are able to determine where it is incorporated in the chemical process. For example, the chemistry of lignite differs from those of anthracite. This phrasing is known as ?coal rank? in coal industry terminology. 4) PERMEABILITY When you're starting to consider CBM production, this and subsequently item should be examined. How permeable may be the CBM property? You would like permeability, otherwise the gas can?t flow. When the coal isn?t permeable whatsoever, you cant ever generate gas. The gas needs to have the ability to flow. If it's very permeable, you'll be able to possibly never pump enough water. Water just just get changed in the large space around the well bore. Water will just continue to come, and you'll never lower pressure therefore the gas could be launched. 5) WATER In an exceedingly high proportion of CBM plays, the coal consists of a great deal of water. You need to pump water off to be able to lessen the pressure within the coal mattress. Gas is locked in coal by pressure. The much deeper you decide to go, often the more gas you receive, since the pressure is greater. The best way to induce the gas to begin flowing would be to pump water from the coal minimizing the ?water mind? of pressure. Just how much water shall we be likely to produce? Shall we be going to need to dump it? Whether it?utes fresh, then there might be issues with regulating agencies. In Alberta, the federal government has limitations on removing freshwater because others might opt for it. You could be making use of a zone that individuals use as water bores for farms and rural towns. Both water quality and volume of water matter. For instance, Manville water is extremely salient so nobody really wants to place it right into a river this water is pressed down again into existing gas and oil wells in permeable zones (but that are

also not attached to the coal). 6) FUNDING To have the ability to access land and perform some initial drilling, i.e. the very first round of financing, it might cost no less than C$4 million. This could include some geological work and drilling a minimum of 5 or 6 wells. In Horseshoe, that will cost around C$4 million (say first round of finance) in Manville, about C$9 million. This really is underneath the assumption that the organization doesn?t purchase the land. The land in western Canada is extremely costly and tightly held. A lot of the job is performed like a ?farm in? drilling on land held by another for any area of the play. (Editor?s note: Throughout an earlier interview, Dr. Marchioni said about his preference for Off-shore Asia China Energy?s land position in China because comparable land in western Canada might have cost ?$100 million or even more.? 7) INFRASTRUCTURE The geology only informs you what?s there, and what the likelihood of success are. After this you need to pursue it. Are we able to market it? Gas costs are ?local,? meaning they change from nation to nation, depending whether it's in your area created as well as in what abundance (or lack thereof). Just how much are we able to extract? Just how much will it ended up costing to have it from the ground? Exist easily available services with this property? Will you need to helicopter a rig to the property at some incredible cost simply to drill it? Will you need to develop a pipeline to move the gas? Or, in China for example, exist established convoys for trucking LNG across 100s of kilometers? One addition, which we've pointed out in the past articles, and mainly in the Market Outlook Journal, ?Quality of Management Draws in PR,? it is crucial that the CBM company have observed management. This could mean an administration team which includes individuals who've become results, not just a veteran exploration geologist but a team that may sell the storyline and produce within the mandatory financing to maneuver the project into production. You will find two primary explanations why a number of these coalbed methane plays are now being given serious attention. First, the macroeconomic reason is the fact that rising energy costs have driven companies within the energy fields to pursue any economic projects to assist fill the power gap. Coalbed methane includes a a lot more than 2 decades of proof within the U . s . States. The thrill has spread to Canada, India and china, where CBM exploration is starting to consider off. Second, the essential reason is the fact that exploration work was already completed in delineating coal deposits. You will find, possibly, 800 coal basins globally, with under 50 CBM creating basins. Quite simply, there's the opportunity of development in this sector.

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