i scoffed, the first time i read about this. when macbank floated ch4, and one of their own analysts canned it,i gloated.
then things changed, prices increased,and as the facts [and my perception of the facts] matured,i changed my mind.
i still think dodgy coal gas is very dodgy indeed, but origin in their last report seems to have indicated that central queensland coal gas could be a billion dollar enterprise for them medium term.
central queensland coal gas is australias newest energy province, and i missed it.
if the papua gas pipeline doesn't get up,[and eventually goes to china] then coal gas is the replacement for qld.
american coal gas is higher priced, and extensive infrastructure exists, so i prefer smaller operations there, rather than 'hope stocks' in australia.
mahalo 2 spudding this weekend for comet/santos/origin is my most immediate coal gas hope.
still, you read reports of some of the coal gas drillers [ shallow targets, easier digging , ,lot of coal around, cheap to poke a few holes about]
and wonder-----
too tight,no gas
too porus, cannot dewater.
some of the stuff sold to hopeful aussies by more experienced americans seems to be fully priced.
and in seam gassification may not be science fiction-----what impact it might have, i don't know, but i am not scoffing too soon this time.

Hybrid, you have arrived at the same conclusions I have

-- see Stocks based on ASX code - "QGC quick profits..." thread

But I am still not sure, does the gas come from the seam, or from the bedding immediately above?

Is there uneven-ness of gas accumulation? . At least with gas/oil strata, I understand the process, of migration and accumulation.

g'day benthonic, it was your post that spurred me to admit my misjudgement.
there is a bit of stuff floating about on coal seam gas, this link is a good thumbnail.
http://www.stockinterview.com/cbm-tips.html

thanks Hybrid.
wikipedia is quite good for a basic understanding, as well. Summarised thus :

Coal bed methane extraction (CBM extraction) is a method for extracting methane from a coal deposit. The methane is chemically bound onto the coal macerals and is released when the coal seam is depressurised. To economically retrieve reserves of methane, wells are drilled into the deposit, the seam is dewatered, then the methane is extracted from the seam, compressed and piped to market. The goal is to decrease the water pressure by pumping some of the water through the well. The decrease in pressure coaxes dissolved methane into its gaseous form, enabling it to be recovered. Disposal of the water, which may contain impurities such as salt, presents an environmental problem as does the resulting lowering of the water table.

This process involves the drilling of tens of thousands of wells, and extensive support facilities such as roads, pipelines and compressors.

Seven percent of the natural gas (methane) currently produced in the United States comes from CBM extraction.

....

I think that spells out the issues. My geological mind turns to the matter of reserves, and how interpretive this can be. And then subject to error, in reporting. QGC have just been announcing that they are getting better returns (> 1mill cu.ft a day) from their Berwyndale South wells. Clearly this is clover as the incremental production comes at little cost.

Origin also report in their Spring Gully CSG they are getting better production and less water than expected.

The coal wouldn't have to be brilliant quality, though less impurities (fines/ shale bands and the like) mean more gas production.

Water management is an issue, esp if operating somewhere like Great Artesian Basin. QGC are even looking at reverse osmosis treatment and supplying Condamine with water (potable?).

Next issue is life of such assets, and which Co is best positioned, (and it seems that Qld is the place to go. )

Regards.

Today's Fin review, admittedly in the "due diligence" column p64 reckons that the smaller coal seam gas Co's like QGC and AOE are attractive targets for the bigger guys (ORG, AGL) as the need for consolidation firms up, but that the recent price rises may already reflect this.

Meantime, the pipeline plays going on, with ALN, AGL, B&B, APA, Gasnet and other players all jostling for what is looking like the emergence of a true national grid. Until this ownership of these is settled, decisions on acquiring additional reserves may be on hold. And the on again/ off again New Guinea pipeline casts a shadow on calculations.

The other thing that has come to my attention is the size of these projects - ORG is planning a 1000MW power station co-located with Spring Gully (Surat basin), based on CSM gas. This is big.

Benthonic.

Now what? why does it matter. Even if you picked it as a winner from the start - it still isn't the best investment (shares) out there.

disapointment from mahalo 2---not a sausage.
comet now back to pre-spud price levels.quite a bit of thinking to do before the mahalo project gets revisited.
the washington state coal seam gas at cedar creek might be next csg for them.[and conventional targets in colorado getting closer]
mahalo though , was intended to test the 'inferred' gas cap from mahalo 1.......looks like a case of 'inferred' meant guessed [or something didn't quite go right.]

saw a report on the Darling Downs on Landline this morning (nice to stay home on this Monday holiday and catch such a program)

The impact of the Surat basin development is amazing. What were sleepy little towns struggling to hold population have turned, and then some.

Dalby, Chinchilla, Roma, and others have had to deal with rising demand for services, housing shortages, land price and rent escalation.

The impact if the "missing link" railway through to Gladstone will add to this dramatic mprovement (Is it going to be standard guage or 3'6" ?) and open up all the coal mines for development.

And was good to see pix, and get a feel for the actual size of the operations. Big plant, big equipment, big $$s. Sometimes reports and stuff off the 'net doesn't convey the actual scale and complexity, which is why getting the analysts out to actually see the operation, meet the workers and admin staff, get a feel for things is important. This then has to be conveyed to the market.

Cheers

Yep, the landline program on Sunday and repeated Monday was an eye opener and mentioned exposure of ORIGIN (ORG), QLD GAS (QGC), ARROW (AOE) and Linc Energy (LNC) , I think all on ASX. Outlined the three lines of production, Coal, Coal Seam Gas, Liquification of Gas, with some developing Power Stations allowing them to sell either electricity or Gas depending on market demand at particular times. Other bi Product from Coal Seam Gas industry in dry areas is plenty of water that needs some treatment before use in agriculture; this then available for plans for ethanol development from local grain production. Wonder if Forum's Dudley from Dalby can give further clarification , Seems an almost unbelievable pandora's box in a previously hard hit area. Cheers

yeah I also saw the program just before lunch today. Was quite amazing. I thought that the drought had almost killed the area. Man was I wrong! It's boom time in South West Queensland, all because of coal and coal seam gas. Even the water problem has been eased to some degree as water is a by product of coal seam gas. Although its salty it still can be used for some things--chinchilla now has enough for ten years And they are hoping to irrigate some crops.
Rents for housing in the area have gone from about $200 for a three bedroom house to about $500! In chinchilla blocks of residential land are going for about $200000. But would you want to live there? I love the black soil plains but it's way too hot for this old dude.

having a quiet beer, going through the mails annual report delivery.
origin's report is worthwhile. the outline of their surat and bowen basin interests is notable. [broadband users wouldn't be wasting their time getting it online]
happy long term origin holder [okay divvies,not quite enough] but interesting, with scale enough to make an odd mistake,and be able to nurse it until it comes good. the traders that sold it down on bassgas teething difficulties were shortsighted , imho. [and about 100 drills a year as exploration spark.]
okay it might be somewhat geeky to do reports as bedtime reading, but they are mostly interesting, [and sometimes downright hilarious]

santos moving on queensland gas company------$1.26 cash.
shows how uber-sucky the mahalo dud was.
coal seam gas consolidating.