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Oklahoma: where companies drill for CBM on the plains

World Coal,

Energy Revenue America, Inc., (ERA) a firm focused on the acquisition, development and exploration of coalbed methane (CBM), has provided a funding update on the Company's 3100 acres in Nowata County, Oklahoma.

Funding of US$ 1.2 million has been secured and will be used to drill the first 10 wells of the 300 wells ERA expects to drill in the future. Over the next 5 years, the company plans to drill in excess of 300 wells in the Cherokee Basin. For every well completed, the reserve value for future gas from the wells becomes a value to ERA as future income. ERA estimates that on the 300 well programme, gas reserves at the end of the second financial year will exceed US$ 80 million and over US$ 150 million one year later.

"This funding is a non-dilutive transaction and is excellent as we seek to continue to increase shareholder value," said Charles Havens, ERA's chairman and chief operations officer.

The Cherokee Basin

The Cherokee Basin is located in the Mid-Continent region in southern Kansas, northern Oklahoma, and western Missouri. It is the eighth largest coal bed methane basin in the United States and covers approximately 26 500 square miles.

Production of coal bed methane gas has been ongoing in the basin since the 1980s. The predominant production is natural gas produced from coals and shale. As commodity prices increased over the past few years, the attraction to these shallow long-lived unconventional resources have increased.

There are multiple producing coal zones in the Cherokee Basin including the Rowe, Riverton, Weir-Pitt, and Dawson. The carbonaceous shale zone known as the Mulky/Iron Post has been a favoured recompletion target for many operators because its presence in most wells is shallower than the main objective pay zones, and will generate good cash flow with less expense. In addition, there are other productive shale zones, as well as conventional sandstone and limestone potential that can add gas production.

Producing coal bed methane zones get deeper moving from east to west across the Cherokee Basin. Portions of Nowata County, Oklahoma produce from depths that range from about 700 ft – 1300 ft in depth. Wells in this area usually cost less than US$ 150,000 to drill and complete.

Edited from various sources by Sam Dodson

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