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Alkane Energy seeking partner in CBM exploration in the UK

World Coal,

Envoi Limited, specialist A and D advisors to the international oil and gas sector, has been commissioned by AIM listed Alkane Energy Plc (Alkane) to find a strategic partner to join them in exploring and exploiting the CBM potential, initially of two licenses (PEDL191 and PEDL 090), in the UK’s historic South Lancashire and North Nottinghamshire coalfields which cover a combined area of 503 km².

Alkane is a proven and established operator in the region with successful CMM (Coal Mine Methane) and associated Power Generation Operations (PGO) capabilities but their Acreage also has CBM (Coal Bed Methane) potential that has yet to be targeted.  In preference to building their own CBM team, expertise and the time this might take, Alkane is now seeking an established CBM player with a proven track record, the experience and necessary funding to joint venture with them and operate the exploration and exploitation of the CBM resources in their acreage.

UK coalfields

The U.K.’s coalfields have a well-documented relatively high methane content, but both PEDL 090 and 191 show an above average gas content.  Independent coal industry consultants Tesla-IMC International Ltd. have carried out a CBM resource evaluation and confirmed combined a ‘best case’ CBM gas-in-place resources of 403 billion ft3, with an upside in excess of 600 billion ft3. The South Lancashire coals around PEDL 191 are ranked as second only in gas content to the high-grade coal seams after South Wales. The CMB potential of PEDL 191 is already being proven in the adjacent block where the CBM powered electricity pilot project at Doe Green is the first such commercially viable operation in the UK and now reported will be fully developed in the near future.

Neil O’Brien, Alkane’s CEO said; “In the U.S and Australia where shale gas and CBM are a key part of the dramatic growth in ‘unconventional resources’ and in the US alone now accounts for around 20% of domestic gas supply. There is no doubt that ‘unconventional gas’ which is largely unexplored in the UK, has the potential to become increasingly important to the U.K too, however, it is likely to require the specialist technical knowledge, operational experience and resources from established players from the US, Australia and elsewhere for the UK to catch up and fully develop its unconventional potential.” 

The initial offer from Alkane, for an established CBM player, is a 50% working interest in the CBM resources of PEDL 090 and 191 in return for planning, operating and funding an agreed CBM exploration programme within those licenses.  It is hoped that this may lead to a full strategic partnership to include participation in the forthcoming UK onshore 14th license Round.

Following the reduction in mining in the U.K. and the deregulation of the gas industry in 1998 CMM has increased steadily, with around 140MW of installed generation capacity on abandoned coalmines.  However, CBM is still in its relative infancy in the U.K. when compared to the U.S. and Australia, but has large quantities of known reserves of un-mined gassy coal in place.

Interested parties should contact Mike Lakin at Envoi for further information
tel: +44 (0)20 8566 1310,

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