Coal 2.0 - CBM/CSG, UCG, CTL etc.

Here's a new player with a catchy name and a different plan.

ZEEP - Zero Emissions Energy Plants

http://www.zeep.com/zeep-energy-centers/index.php

ZEEP is looking to use a "syngas refinery" business model, where they neither own the base resources or do the conversion to value-added products. Instead they will very simply just refine coal/biomass/whatever into various forms of syngas and then sell this on to people who can afford to construct GTL plants and what have you.

This makes sense to me, and you will even be able to invest in it soon (if you want) as it's coming to the TSX Venture exchange via a reverse takeover of Goldsource Mines (V.GXS).

While I'm here ...

If you want to look at above-ground CTL in Canada then 49 North Resources (V.FNR) is the kiddie. They have, via stakes in "investee" companies, managed to get their hands on most of the stranded surface-mineable coal in Saskewatchan plus a bit more in Manitoba. This amounts to some number of billions of tonnes. Not quite up to Australian quantities but definitely "not insignificant".

They also have a license agreement with Quantex, the firm which New Hope has partnered with in Oz who have a "coal to bitumen" direct liquefaction process.The idea presumably being to plug into the pre-existing oil sands infrastructure etc.

The company also has a boat load of other investments in conventional oil and gas and various mining projects. It is basically a closed-end fund (investment trust) which currently trades at a massive discount to a grossly under-estimated NAV.

http://www.fnr.ca

Been a while ...

I'm not hugely motivated to keep this thread up in general, but here is a broker report from Madison Williams in the US on Linc Energy.

Amongst other things they've done the sums on Linc's vast assortment of worldwide tenements, and come up with a fairly astounding acreage figure.

In total, we calculate that Linc has more than 21 million acres in oil/gas/coal leases and tenements around the world

http://www.madisonwilliams.com/images/OTCQX/LNCGY%20-%20MW%20Initiation%20Report.pdf

Clean Global Energy have signed a "Technology Licensing Agreement" with Indian oil major Essar.

http://www.stocknessmonster.com/news-item?E=ASX&S=CGV&N=528458

The market likes it, and so do I FWIW. For a $10m company that is one big partner to have.

Meanwhile, Linc Energy has released some cryptic stuff about their first conventional gas well in Alaska.

http://www.stocknessmonster.com/news-item?E=ASX&S=LNC&N=228937

I am clueless about these things but it looks like they may have over 1,000m depth of possible gas containing sands (not all of which will be "pay zones"). Flow tests have been delayed by the winter but are now scheduled for March time. Quite promising I suppose?

Remember Linc is just using conventional oil, gas and coal to bootstrap it's UCG world domination plan.

Well the market certainly took a shine to that announcement from Syngas. The stock was up overnight 158% on volume of 260m shares, which exceeds the total number of shares in issue. Day traders eh?

http://finance.yahoo.com/q?s=SYS.AX

Even with this large rise, the market cap of SYS is still only around A$8-10m. If the Clinton project ever does come to fruition, with the Chinese sorting out debt funding of up to 85%, that valuation might look a bit silly.

Yet another JV between an Aussie CTL company and the Chinese.

From Syngas Ltd (ASX:SYS):-

"MoU with CNEEC over the Clinton Coal to Liquid Project"

http://www.stocknessmonster.com/news-item?S=SYS&E=ASX&N=511741

Header updated.

Removed Arrow Energy, and added Dart Energy into which Arrow's rump explo assets have been spun off.

Also removed Spitfire Oil, which is now a gold explorer, and Bio Clean Coal which seems to have disappeared.

One news item of UK relevance. The above mentioned Dart Energy has taken a 10% stake in private Scottish outfit Composite Energy.

http://www.composite-energy.co.uk/page-20100903-134519.html

Not strictly coal related, but Central Petroleum knows how to keep the punters happy.

The "Daily RNS" ... (pink ones are "price-sensitive")

From http://www.stocknessmonster.com/news-history?S=CTP&E=ASX

SASOL may cancel $10bn Coal Liquefaction Project in Indonesia

...as there is no guarantee of coal supply to feed the project.  Sasol wants a guarantee in supply with at least 2 billion coal reserve.

This is significant.

New Hope Corporation (ASX:NHC - a producing Aussie thermal coal miner) has finally revealed the details of its CTL plans, which it has been mentioning in a vague manner for some time.

New Hope Corporation Limited to Commercialise New Coal to Liquids Technology with Superior Environmental Performance

http://www.stocknessmonster.com/news-item?S=NHC&E=ASX&N=223890

Basically, they are going to commercialise a technology from "Quantex Research Corporation (QRC), a private Canadian company which has acquired the technology rights with a license from the West Virginia University in the USA". This technology is a direct liquefaction process which produces "pitch" (or I dare say you could call it bitumen) which can then be upgraded into synthetic crude oil much like they do in the Canadian oil sands. Importantly, the process produces much less CO2 than conventional coal gasification as used to feed Fischer-Tropsch reactors, and even better there is a marketable by-product which they describe as "synthetic metallurgical coke" .

New Hope is a serious conservative "establishment" company, who have access to billions in cash and funding. I do not think they would undertake a project like this without estimating a very high probability of success. As I say, significant ...

It looks like AFC (B9 Coal) and Linc have plans for the North East, the cradle of the UK's former coal greatness.

SOUTH east Northumberland could become the base for a pioneering bid to produce almost emission-free electricity from coal without having to mine it first.

http://www.newspostleader.co.uk/latest/Plant-in-the-frame-as.6508506.jp

Linc have declared a special dividend of 10c per share following the $500m coal sale.

http://www.stocknessmonster.com/news-item?E=ASX&S=LNC&N=223453

The cost will be about $50m, leaving plenty in the kitty for whatever comes next.

Err I think that's Coal 1.0 - conventional mining ...

Correct me if I'm wrong. It has been known, often :-)

Just cross-linking to the latest Continental Coal writeup here: http://www.stockopedia.com/content/emerging-south-africa-coal-play-continental-coal-limited-looks-to-join-aim-46913/

OK $30m then ;-) I was being silly really, a farm-in is far more likely.

Or ... Is there perhaps some value to be had for Linc in getting involved with gas fraccing, as per Romania/Poland etc? It's all underground and "clever" stuff.

Hi Mattybuoy,

"Around $20m ought to do it. "

Doubt it. The principals own around 50% of the shares. ;0) They might settle for $30m, though - still peanuts if Bond thinks their stuff has value.

Not sure whether the East European licences would allow access to coal seams, or whether they're restricted to conventional oil&gas. Nevertheless, I have a v small punt in this stock, as it appears that the conventional EE stuff might be quite a nice asset, being co-developed with Aurelian Oil & Gas Plc (LON:AUL) (as well as there being upside potential to their uK producing stuff).

Thanks for pointing out the farm-in potential of the new licences. A nice "free option", alongside the other assets.

Cheers,

Mark

I just had a very quick look at Europa. Seems like an interesting bunch of assets languishing a bit due to lack of funding.

If I was Peter Bond I think I'd make an offer for the whole shebang. Around $20m ought to do it. Quite a nice European entry for Linc methinks. You can bet your arse half of those Eastern European licenses have some deep coal in them, apart from anything else.

Well spotted!

I'd hazard a guess that they'll get someone to farm-in, like Linc, with their big wad of cash. You might notice that they are mentioned in the "Useful Links" at the bottom of the RNS.

Linc basically want to own all the coal they can get their hands on, so I can definitely see them getting involved in the UK and the rest of Europe.

The North Sea may have considerable potential for UCG. I saw somewhere that Norway estimated there to be around 3 trillion tonnes of coal in their bit, and you have something of a ready made gas handling infrastructure to hand.

[ EDIT - Just noticed new analyst coverage for LNC ]

http://www.vision6.com.au/download/files/21473/1231411/LNC_Initiating_Report_160810.pdf

It seems that Europa Oil & Gas (LON:EOG) is proposing to get into the UCG business in the UK: http://www.investegate.co.uk/Article.aspx?id=20100818070000P77A1

With a market cap of £9m and around £1m of cash, how they propose to finance any serious work on this is a mystery to me.

Cheers,

Mark

Wildhorse Energy has entered into a "strategic alliance" with Dalkia (a subsidiary of EDF).

http://www.stocknessmonster.com/news-item?S=WHE&E=ASX&N=501302

Basically, it involves a syngas off-take agreement and a placement.

It's very important to get the power companies on board with UCG, since they are in most places the biggest potential consumers of syngas. So good stuff IMO.

Here you go.

"LNC sells Galilee Coal Tenement for $3 Billion"

http://www.stocknessmonster.com/news-item?S=LNC&E=ASX&N=222623

The "$3 Billion" is not all in one go. Most of it's in the form of a 20 year royalty, with "only" $500m up-front. Still, that's quite a chunk of change to be playing with, and there are two more property sales pending.

Quite a lot has been going on with UCG in Oz. For example, Cougar Energy's trial plant has been shut down ostensibly for environmental reasons. This is part of the on-going "war" with the CSG industry in Queensland.

However, for Linc Energy things are looking rather good.

Firstly, according to this Australian press article, tomorrow should see the signing of a deal with Adani Enterprises of India which will raise around $1bn cash from the sale of a thermal coal property.

http://www.smh.com.au/business/linc-adani-complete-their-coal-connection-20100801-111d7.html

There are two other properties also in the process of being sold, which may fetch another $1bn odd.

Then secondly, the company is due to spud a conventional gas well in Alaska in September which is targeting a potential 1 TCF.  The location is very monetisable, being 2 miles from a under-utilised pipeline which feeds Anchorage, where gas prices are currently around $7/mcf.

http://ir.geopetro.com/phoenix.zhtml?c=196336&p=irol-newsArticle&ID=1447180&highlight=

So, the best case scenario is that in say 6 months time Linc will have a) $2bn in cash and b) substantial cash flow from nat gas production sold at a premium price. Quite a platform for pursuing the UCG->GTL dream ...

The stock has been going up recently and closed last night at A$1.90, so with around 520m shares out that gives you a market cap of A$990m.

Yes it is good, thoughs some detail on the deployment would be nice, like throughput etc. Linc never give out numbers for anything ...

One other point. Linc are always going on about how you need a nice thick and contiguous coal seam to do UCG properly. However, as I understand it, while there certainly is a lot stranded deep coal in the UK it is mostly in thin highly-faulted seams.

this combination provides potential access to billions of additional tonnes of coal in the UK without the environmental impacts of conventional underground or open cast mining

These words were not present in the Linc announcement to the ASX last night.

Another thing to bear in mind. Despite the hype, Linc are only intending to use these fuel cells where they have a GTL plant which produces surplus hydrogen. They are not seeing it as the primary means to generate electricity from syngas, this will be done using conventional gas turbines etc.

'AFC Energy plc (LSE:AFC) ("AFC Energy"), a leading developer of low-cost alkaline fuel cells, is pleased to announce that an alkaline fuel cell system has been successfully deployed and operated at Linc Energy's (ASX:LNC) ("Linc Energy") underground coal gasification ("UCG") demonstration facility in Chinchilla, Australia........'

'......this combination provides potential access to billions of additional tonnes of coal in the UK without the environmental impacts of conventional underground or open cast mining. The alkaline fuel cell converts hydrogen to electricity at 60 per cent. efficiency and at an estimated cost per kilowatt hour as low as 4 pence....'

http://www.investegate.co.uk/Article.aspx?id=201006290700103852O

Looks good so far.... but a long way to go.

AA

Added another couple of companies to the header ...

One is called C2E International, a private Hong Kong based enterprise which claims to have invented a "zero-emission" CTL process. Unfortunately there is no substantive information on the website to back this up, however I suspect this is just the usual Chinese opacity, rather than misrepresentation. They supposedly have a 1,900 bpd trial plant in operation already.

The other company is CanAm Coal (TSX:COE), who are licensing the C2E technology with a view to using it at their Alabama and Colorado coal projects. It should be interesting to watch how this goes, to see if the tech works and also what sort of obstacles get thrown up by politics etc.

Meanwhile WildHorse Energy has bought another UCG license in Hungary.

http://www.stocknessmonster.com/news-item?T=9VLXziwLehQSLXmKOHncCA&E=ASX&S=WHE&N=494878

Blackham Resources has released a study on the mining costs of its above-ground Scaddan CTL project.

http://www.stocknessmonster.com/news-item?S=BLK&E=ASX&N=494854

They reckon $8.22/bbl equivalent. However, this is only the "cheap and easy bit", there is a GTL plant that needs to be accounted for too ...

One thing I found quite surprising was how long it takes (or doesn't take) for the UCG->GTL process to convert the raw underground coal to diesel. It's 6 minutes from the point of ignition, which to my mind is quite stunning.

If you believe in the UCG and GTL story, which I realise most people probably don't, then Linc represents a very good way in. The impending met coal sales de-risk the current market cap entirely. So you could think of it as a zero cost option on around 100bn barrels of oil ...

Yes there's a bit. I can't remember how far in though.

Basically, Linc see the hydrogen/fuel cell thing as a big plus point for Europe, where CO2 is a big issue and has to be paid for. Which, considering they currently have no projects on the continent, shows how long-term they are thinking.

AFC were described as something like "a great bunch of guys ... engineers" and the product as "actually working, not just lab scale".

The whole thing is well worth a listen.

Matty - anything on there about the fuel cells 'Linc' up with AFC Energy?

If you can stand 1.5 hours of unabashed Australian style ramping and "straight talk" then the webcast below from Linc Energy is well worth listening to, with much interesting info to be gleaned way beyond what has been disclosed to the ASX.

About one third of the time is taken up, unusually, by a fund manager who a) appears to have a brain and b) explains why his firm is very keen on LNC.

http://www.brr.com.au/event/66149/the-power-of-underground-coal-gasification

Yes indeed :-)

It's worth noting that the Chinese are also involved in JVs with fellow conventional CTL player Blackham Resources as well as 3 out of 4 of the UCG companies CGV, CXY & LNC.

Contrast with the deafening silence on these issues from the Western oil majors ... One might speculate that things will get viewed in a new light after the true costs of deep offshore oil are re-calculated after the GoM disaster is finally over in around about 2035 or so. Maybe.

Altona Energy Plc ('Altona' or 'the Company')
CNOOC-NEIA - Successful FIRB Assessment

Altona Energy Plc, the AIM listed Australia-based energy company, is pleased to
announce that CNOOC New Energy International (Australia) Pty Ltd ('CNOOC-NEIA'),
has received notification from the Foreign Investment Review Board ('FIRB') that
there is no objection under Australia's Foreign Investment Policy for its
participation in and establishment of the Arckaringa Unincorporated Evaluation
Joint Venture ('the JV').

Formed specifically for the JV with Altona, CNOOC-NEIA is an Australian
subsidiary of CNOOC-NEI, one of China's major oil companies. Following the FIRB
assessment, the JV is able to proceed on the terms agreed, the first step of
which is for CNOOC-NEIA to provide the funding for the completion of a Bankable
Feasibility Study ('BFS') for the commercialisation of the Arckaringa Project.

Altona Chairman Chris Lambert said, "The success of CNOOC-NEIA's formal
application to FIRB represents a crucial milestone for the JV as it opens the
gate for the full mobilisation of JV resources and advancement of the BFS for
the Arckaringa Project. CNOOC-NEIA is now able to release the capital required
for the all-important BFS, which will determine the most profitable applications
for our 7.8 billion tonne coal resource.

Wildhorse Energy (ASX:WHE) has released a Scoping Study on its UCG project in Hungary.

http://www.stocknessmonster.com/news-item?S=WHE&E=ASX&N=491646

It's worth noting that until quite recently this company was entirely focused on uranium. However, when you see figures quoted like 20-25 Euros/GJ for Eastern European natural gas prices in the 2035 timeframe the attraction of Hungarian gas in any form becomes quite clear.

Been a while ...

I found an interesting company over in Canada  - Peat Resources (TSX:PET).

http://www.peatresources.com

Peat is a form of "decomposing biomass" or "quasi-coal" which is the first stage in the long-term decomposition and compression cycle which ends up with the high-energy products of bituminous, metallurgical and anthracite coals.

Living biomass -> Peat -> Lignite -> Sub-bituminous -> Bituminous etc.

Several countries burn peat for power generation including Ireland and Finland. However, they do it in an "unsustainable" way which involves draining in their entirety the bogs wherein the peat lies and then digging it up. This leaves a useless (at least in the short term) hole in the ground. If you've ever been there this is how the Norfolk Broads were formed.

Peat Resources however believes that it has come up with a way to mine the peat in a sustainable manner. This involves a) only removing as much peat over a timeframe as the area can replenish and b) not draining the bog but using techniques to remove the peat while leaving the water in place. This latter apparently forms an instant carbon sink, so not only is the process carbon neutral it actually removes carbon from the atmosphere.

Well that's what the company says at least, and in order to put meat on the bones of the theory they are currently engaged in testing things out in Newfoundland in eastern Canada.

Besides this trial initiative the company has staked out a lot of peat-containing ground in Ontario, where the hope/plan is to supply it to existing coal-fired power stations either as a replacement for coal or as a supplement. Adapting coal-burning equipment to peat is supposedly not too difficult or expensive.

As with a lot of things, Canada has the largest resources of peat in the world. So I guess the long-term thing here is to roll out the sustainable extraction process to as many places as possible, perhaps pursuing international opportunities along side. Using technology to farm in to stranded or useless resources at a cheap price, this is exactly the kind of play I like.

If the thing works, it may be a way to have your cake and eat it too. Burning "coal" while simultaneously removing carbon from the atmosphere. How about that? !

The company has a miniscule market cap, but will need substantial funding if it is to ever move to commercial production.

Have a look at the website if you are interested.

Meanwhile, Linc has arranged an A$81m stand-by convertible loan facility with a US scalping outfit.

Peter Bond, CEO of Linc Energy, said today, "The SpringTree Agreement increases our available funds and will replace the Yorkville convertible note facility which has remained undrawn for about 3 years. The SpringTree facility is on good terms and very user friendly.
Whilst it is not Linc Energy's only available funding option, this facility is certainly a very
good alternative which provides the Company with the flexibility to continue to execute its
business plan for the foreseeable future and prior to the conclusion of a coal asset sale. The facility has the added benefit of being able to be cancelled by the Company at any time if it is no longer required."

http://www.stocknessmonster.com/news-item?S=LNC&E=ASX&N=219510

Several RNS's from Altona today, which seem to suggest that the recent price share price rise is down to the recent $40bn BG/CNOOC CSG/LNG deal which was approved by the FIRB.

The company has also completed an over-subscribed placing for £3m at 9p.

http://www.investegate.co.uk/Article.aspx?id=201003300700383866J

Thanks, though I had found out for myself too :-)

As an aside, I am a bit dis-chuffed that the formatting of the company list in the header is now all to cock. I will have to sort it out.

[ EDIT - Done, by virtue of removing the Ps, which is a shame but there you go ... ]

Altona going ballistic from 7p to 19p in a week and no-one seems to know why.

Perhaps this note from Evolution is something to do with it? They value the share at 34p.

http://go2.wordpress.com/?id=725X1342&site=altonaenergy.wordpress.com&url=http%3A%2F%2Faltonaenergy.files.wordpress.com%2F2010%2F03%2Fevo20altona20energy20initiation201920032010.pdf&sref=

Closed at around $5.10 ...

Here's Bloomberg's take:

http://www.bloomberg.com/apps/news?pid=conewsstory&tkr=AOE%3AAU&sid=aQECu3CYWVVU

The offer values Arrow’s proven and probable reserves at less than half of what BG Group Plc paid for Queensland Gas Co. in 2008, and a quarter of what Origin Energy Ltd. received from selling a stake in a venture to ConocoPhillips, RBS Morgans analyst Nik Burns said.

So there still could be more fun to be had ... :-)

The stock is up 40% on the ASX ...

http://www.stocknessmonster.com/stock-quote?S=AOE&E=ASX

Interestingly, the price is now at around $4.90 whereas the offer is at $4.45. So it looks like the Aussies think there might be competing bids.

Arrow Energy receives a take-over offer from Shell and Petrochina valued at around $3bn.

http://www.stocknessmonster.com/news-item?S=AOE&E=ASX&N=218854

Meanwhile, Linc Energy has been busy, moving into Alaska amongst other things.

"Acquires Alaskan Leases" - http://www.stocknessmonster.com/news-item?S=LNC&E=ASX&N=218711

"Coal Sale etc." - http://www.stocknessmonster.com/news-item?S=LNC&E=ASX&N=218776

My opinion of this company is improving a bit now. The asset base keeps growing in large increments, and the monetisation of even a small part of it should lead to fairly massive increases in value. I also like the mix, since there is conventional coal, oil & gas alongside the UCG/GTL.

Carbon Energy is experiencing delays with its initial 5MW UCG syngas-fired power plant.

http://www.stocknessmonster.com/news-item?E=ASX&S=CNX&N=218738

The main problem seems to be with the injection well of "Panel 1".

Teething troubles or something more fundamental? Time will tell ...

CTP complete another well with three times more coal depth than expected:
Also run into more issues with their JV partners.....if they don't want to be part of the party, why don't they just bugger orf!!?

http://www.asx.com.au/asx/research/companyInfo.do?by=asxCode&asxCode=CTP

Also released last night, a mini-presentation from Cougar Energy.

"The Cougar is Coming ..."

http://www.stocknessmonster.com/news-item?S=CXY&E=ASX&N=332550

This represents a step change in marketing for this company, and shows a good degree of confidence in the future.

Latest update from the miraculous Regal Resources.

"Pilot Plant Commissioning"

http://www.stocknessmonster.com/news-item?S=RER&E=ASX&N=481191

They're going to do some testing of the process at surface first.

The kit looks quite funky.

Hi Mattybuoy,

I note that Island Gas Resources is presenting at Proactive Investors next week, Thursday 11th.

http://www.proactiveinvestors.co.uk/eventregistration.php

Linc Energy strikes oil while looking for coal.

OIL SHOW
During drilling of Maglia-1, oil shows and a strong petroliferous odour were observed within
cored sandstones at 366.4 to 369.4 and 393.4 to 396.4 metres coring depth. Subsequent
laboratory analyses of the Maglia-1 oil samples by ‘Geotechnical Services’ have confirmed a
low pristane to phytane ratio and the presence of norhopanes in the biomarker fraction,
which is typical of a carbonate based source. An abundance of C27 steranes relative to
C29 counterparts, indicates the likelihood of an algal based origin with the analysis of the
aromatic fraction indicating a very high level of thermal maturity (>1% RO).

http://www.stocknessmonster.com/news-item?S=LNC&E=ASX&N=218030

That is some techno-gobbledegook, but I think it just means that there is an active petroleum system in the area.

This is in the Arckaringa Basin, where Altona are operating under a Mining License. Linc on the other hand has Petroleum Licenses, which in South Australia cover both UCG & CSG along with conventional O&G.

I am not hugely keen on the "style" of this company, but its asset base is much larger and more diversified than any of the other UCG players. Which mostly explains why it has a bigger market cap.

The Oil Drum takes a look at UCG:-

http://www.theoildrum.com/node/6164

Most of the punters seem sceptical. This seems to be the norm with anything which might mitigate against our impending doom ... :-)

This is not strictly coal related but since it involves one of the companies on the list and is "Energy 2.0" related I will post it.

Eden Energy had a good night on the ASX due to the announcement below. Up 84% on 80m shares traded, which is about 45% of the issued shares. This on a very bad day when virtually everything resource-related was selling off severely.

Eden Energy (“Eden”) has executed a non-binding terms sheet with Indian Oil Corporation Limited (“IOCL”) through which, subject to certain conditions being satisfied, the two companies will enter into a farm-in agreement to scale up a new Pyrolysis technology jointly developed by Eden and the University of Queensland, to produce hydrogen and ultra-strong solid carbon fibres and nanotubes from methane gas.

http://www.stocknessmonster.com/news-item?E=ASX&S=EDE&N=479570

I think it is the "carbon nano-tubes" which got the punters' juices flowing. Apparently, coming up with a cheap way to make these is something of a holy grail, and to have a big company interested validates Eden's efforts.

More generally, this is another "miracle technology" which uses hydrocarbons in a useful way without producing any CO2.

Cougar Energy has "practically completed" its trial UCG plant and is in the process of final commissioning.

Although this plant will not actually produce anything saleable at this point, I find the following comment worthy of quotation:

The Kingaroy UCG site will provide competitive base load electricity to the Australian domestic market given that the costs of production are about half the cost of natural gas (subject to receiving final approvals from the Queensland Government for the commercial plant).

“We benefit from much lower capital expenditures than comparative technologies and do not have to build expensive materials handling, water treatment or gas transportation facilities.

http://www.stocknessmonster.com/news-item?E=ASX&S=CXY&N=331839

If you want an excellent technical overview of UCG and coal gasification in general I would recommend reading the report from Uhde Shedden (part of Thyssen Krupp) in the Clean Global Energy ASX prospectus below. It's on pages 23-64.

http://www.cleanglobalenergy.com.au/_content/documents/319.pdf

It's all very interesting but one thing really leapt out of the pages at me under the "Monetisation of Stranded Coal" section:-

Some of the developing nations, most notably China and India, have vast coal resources. In the case of China, the coal reserves have been estimated at 114 trillion tons of coal, of varying grade (Burton, Friedmann & Upadhye n.d.,p.19).

The 114 trillion tonnes (!) does not seem to be a typo, since they are citing a reference from the bibliography. Unfortunately however the link for the "Burton, Friedmann ..." document does not work.

In contrast, India seems to be something of pauper:-

In India, coal reserves are estimated at 467 billion tonnes, most of which is low grade, containing up to 35 – 50% ash, low calorific value, and hence uneconomic to transport over all but the shortest distances.

I suspect that the huge disparity is mostly down to the Chinese simply having done more geological work. Still, if we assume a rough and ready ratio of a tonne of coal being equivalent to a barrel of oil, the potential rewards for those companies which can successfully monetise this stuff are, to say the least, quite large.

A couple of Oilbarrel articles from last week:-

Altona

IGas

After a long time "under construction" the Laurus Energy website is finally live.

http://www.laurusenergy.com

It seems that rather than just listing on the Venture exchange the company has instead chosen to go the US Venture Capital route for funding and market itself as a cleantech stock. For example, if you click on the Resources section of the site you get the teacher's version of "resources" (what I would perhaps call "Media"), rather than a nice tasty statement of how much coal they're sitting on.

Personally, this sort of positioning brings me out in a rash, but I suppose you can see why they're doing it since alongside an Albertan project they are also operating over the border in Wyoming. Of course as we know the US does not in fact use natural resources they just create technology. Blech.

More materially, I am quite annoyed that this company will not be investable until the big upside has been gained in the private sphere. Oh well, back to Australia then ... ;)

After receiving a speeding fine from the ASX, Cougar Energy has come out with an announcement regarding a JV with an entity called Australia Petroleum Ltd, for the purpose of producing Methane (and eventually LNG) from UCG/Syngas on one of its licenses in Queensland.

http://www.stocknessmonster.com/news-item?S=CXY&E=ASX&N=331513

This new partner seems like it might have some heavy-weight connections.

Australia Petroleum Ltd is headed by Brahim F. Wakeem and chaired by Michael Ahern AO (the former Premier of Queensland). Mr Wakeem controls a number of interests in Australia and off-shore and has significant experience in underground coal gasification and LNG. He brings his network of sovereign, corporate and private investor interests from the Middle East, Japan and Australia to this joint venture as potential future investment partners.

An interesting spiel from an Australian "gold bug" site called GoldOz..

"Due Diligence Report - Underground Coal Gasification"

http://goldoz.com.au/index.php?eID=tx_nawsecuredl&u=0&file=fileadmin/goldoz/downloads/CXY_UCG_Report_final.pdf&t=1264957449&hash=c08f03b4604800400e752ecb50b944e9

I would describe it as tipsheet-like material but veering towards the sensible. It presents an overview of UCG and then focuses on Cougar Energy, one of the three advanced Australian UCG companies.

One paragraph, which won't cut and paste, sheds some light on the rather opaque Canadian UCG scene. Private company Laurus Energy has apparently documented around 2 trillion tonnes of known UCG-suitable coal throughout Canada. Tar sands look out ... ;-)

Definitely worth a read IMO.

I have found another UCG stock. It is listed on the ASX, for a change ... ;-)

WildHorse Energy has a UCG project in Hungary, and some ex-SASOL people are running the show. There are also a couple of decent and relatively mature uranium prospects.

Quite a cool name IMO, and for some reason there are only around 130m fully diluted shares, as opposed to the usual billion or so.

Meanwhile, leading CSG player Arrow Energy has announced a hefty increase in their 2P Reserves.

http://www.stocknessmonster.com/news-item?E=ASX&S=AOE&N=217683

Arrow’s gross proved and probable (2P) reserves have increased 50.3 percent to 6,150 PJ while gross proved, probable and possible (3P) reserves are up 18.6 percent to 11,042 PJ. The company has added 3,458 gross 2P reserves in 12 months which substantially exceeded our target to add at least 1,000 PJ of gross 2P in 2009.

Does anyone know a quick and dirty conversion factor from PetaJoules to TCF or BCF?

Aussie UCG hopeful Liberty Resources, who are partnered with Carbon Energy, stake some ground in Saskatchewan.

http://www.stocknessmonster.com/news-item?S=LBY&E=ASX&N=477796

One interesting tidbit in there, which is that the over-lapping tenement issue seemingly cannot occur in Canada:-

Exploration and extraction for resources are covered by Crown Mineral Act. Regulations for minerals, coal and petroleum are covered by their respective “dispositions”. Application for coal permits is an open over-the-counter process, rather than a tender process. Coal and petroleum dispositions cannot be overlapped – that is, once one or other type is in place, it freezes the ground for the other type of application. This removes the problematic issues of strata titles over the same ground which is encountered in Queensland and many other jurisdictions.

A TV interview with Rohan Gillespie of Regal Resources, he of the miraculous technologies and generous royalties.

http://www.regalresources.com.au/index.php?option=com_content&view=article&id=31%3Arohan-gillespie-interview&catid=3%3Aprojects&Itemid=9

He comes across to me as almost being credible, but then I'm a sucker ;-)

The UCTL trial starts in February.

Trading Statement from Igas. Perhaps unsurprisingly they mention the recent weather and the "gas scare".

The harshest winter for some 40 years in the UK has lead to gas interruptions and highlights the need for an alternative to imported gas to maintain security of supply. IGas now has the funds, the technical knowledge and the sites close to major industrial areas to start delivering secure gas commercially.

http://www.investegate.co.uk/Article.aspx?id=201001130700064526F

Well 12,000 million divided by 55 million would be about $218/bbl in revenue. However I believe SASOL has other revenue streams beyond CTL.

In reply to Mattybuoy (post #43) I trawled internet and looked as Sasol figures for 2008 and can't see where this $312/bbl number comes from.

2008 total Sasol revenue is $12 billion from its activities including petrochemicals business, overseas business and it's 150 kbpd (approx. 55 million bbl/yr) CTL units at Sasolburg(?)/Secunda(?). So no $300/bbl there. Maybe Edison are looking at the subsidies South African CTL fuel receives from RSA government? Anyway I am mystefied.

JPGH

Just read that CTP article.

I like this bit:-

An independent report released on the potential for UCG syngas (synthetic gas) in our Pedirka  Basin acreage stated that 11,000-14,000 trillion cubic feet (311.49 trillion- 396.46 trillion cubic metres) of syngas may be available in a prospective recoverable resource.

Syngas has on average 1/8th of the calorific value of natural gas, so that's somewhere between 1,000-2,000 TCF nat gas equivalent. Or 200 billion BOE perhaps.

You'd have to think a cross continental pipe line would be doable based on those numbers. Obviously no time soon though ...

Yes CCS is key. One reason I like UCG is that it creates a "ready-made" void underground which can (hypothetically) be used to store the produced CO2.

P.S. Thanks to Joe and Rob. Useful stuff.

Couple of points re Altona:

• ISTM that the "elephant in the room" is this (from the Edison note):

Political, including the critical issues of the future diesel tax and excise regime in South Australia and the structure and details of the emissions trading regime to be introduced into Australia in 2010.

Particularly the latter point, as Mattybuoy has highlighted earlier. Unless some form of CCS is included in the project proposal, I can't see the emissions being acceptable, in a political arena with a vocal environmental lobby. 

• The $100/bbl assumption by Edison doesn't strike me as unreasonable, given that the product is distillate/diesel, as opposed to oil needing refining.

Cheers,

Mark

I've been into CTP for a while now - an interesting article here:
http://www.mediafire.com/?zyot1mdzzdl

Because some doubts had been cast on the possibility of Australian FIRB approval for the Altona/CNOOC deal I wrote to the company asking for comment.
This is the reply I got by return:-

Thank you for your enquiry regarding the agreement with CNOOC.
Your comments are noted.
Perhaps this concern is best addressed by saying that CNOOC and Altona have reached the agreement and both parties intend it to be binding. There are however other factors outside of the commercial arrangement between the parties which must be satisfied. These factors are independent of the parties.
It is a fact of law in Australia that qualifying foreign entities have to apply for and receive approval from the Foreign Investment Review Board before the agreement can take effect. This cannot be obtained prior. By virtue of the Chinese government stake in CNOOC, FIRB approval must be sought.
Neither Altona nor CNOOC foresee a problem with FIRB approval, not least of all since the project conforms to FIRB’s investment criteria That it will be a greenfields development is seen as a positive factor. It is noteworthy too that the Arckaringa project is not within the Woomera Prohibited Area which is a sensitive military testing ground.
With respect to Chinese government approval, Altona obviously have no specific insight into their thinking however it is my opinion that it is unlikely that CNOOC would have proceeded to make the agreement were they not confident that such approval was likely. The relationship and discussions between CNOOC and Altona goes back well over a year so there would have been ample time for them to become aware of any disapproval for the investment.
This being said, these decisions are independent of both parties. Altona and CNOOC both expect to receive the necessary approvals but they cannot be guaranteed.
Please find following the link to the FIRB website which may provide further insight.

http://www.firb.gov.au/content/default.asp

With respect to any potential impact on the share price if the deal were not approved, this is of course the realm of speculation. Whilst at first pass this would not be good news and would represent a great disappointment to both parties, any outcome on Altona’s share price might depend on the reasons given. Altona believe that the commercial interest of CNOOC as demonstrated by the time and money they have invested in reaching the agreement has been an endorsement of our thinking and could in fact stimulate the interest of other parties should the door to an evaluation JV once more be opened.

Hope this helps-JR

Having read the Edison note, what struck me most was not strictly related to Altona. It was this:-

SASOL gets $311/bbl average revenue for the liquids that it produces.

First thing: How on earth does it manage that?
Second thing: The Edison 80p valuation assume $100/bbl revenue for Altona's project.

Edison Research have released some new research on Altona today.

http://altonaenergy.files.wordpress.com/2010/01/altona080110outlook.pdf

They value the company at 80p per share "pre-dilution", and it is currently trading around 8p.

First results from CSG drilling on Central Petroleum's licenses:-

http://www.stocknessmonster.com/news-item?E=ASX&S=CTP&N=476097

Not hugely meaningful to me I must say.

More from Altona.

AGM Presentation:-

http://www.altonaenergy.com/PDF/Altona%20AGM%20Presentation%20London%20Dec%2018%202009.pdf

Assuming 50:50 ratio of Coal converted to Liquid Fuels and SNG, the Arckaringa coal resources are respectively 28% and 29% of North Sea proven reserves

It looks like the company will in some way become a "vehicle" for CNOOC's coal initiatives. Also interesting to see that they are now talking about SNG as a substantive product alongside the FT liquids. Very sensible IMO.

There is a major de-risking event around May time when FIRB approval for the project is given (or not).

NOTE: Despite the North Sea comparisons, it is worth considering that Altona only has its foot on a miniscule fraction of the amount of coal that the three UCG musketeers do.

Altona have seen fit to re-iterate the Rentech "air carriers" announcement (above) via a non-regulatory RNS:

http://www.investegate.co.uk/Article.aspx?id=200912171200012986E

I think this is because Rentech are Altona's proposed FT tech provider.

It would give me much greater confidence in Altona if they could manage to stop calling Syngas "synthetic gas".

Yes no doubt conventional CTL is very expensive. That's why I like UCG, which is a lot cheaper and to an extent can provide its own water. You also don't actually have to go the whole GTL route with it. Power generation or SNG are relatively cheap ways to "liberate" the contained energy, and Ammonia/Methanol production are relatively cheap options on the liquids front.

You could hypothetically run all forms of land transportation on a combination of SNG and Methanol. The only thing which actually "needs" conventional fuel is air transportation. At least that's my understanding.

Of course there is a small infrastructural hurdle there, but in the long-run I believe that's the way things will go.

So, could coal be the answer? Few doubt there is enough of the stuff to support a major expansion of CTL (New Scientist, 19 Jan 2008, p 38), and the fuels produced are of a high quality. The drawbacks are formidable: it takes about two tonnes of coal and up to 15 barrels of water to produce a single barrel of synthetic fuels. That makes it expensive. The IEA says that when it comes to US coal, to supply just 10 per cent of US transport fuel consumption would mean investing $70 billion, and raising coal production by 25 per cent - an additional 250 million tonnes per year.

From the New Scientist

Meanwhile, over in the US of A.

"Rentech and Thirteen Air Carriers Sign MOU: Significant Step Towards Fuel Purchase Agreement for Natchez Project"

http://www.rentechinc.com/pdfs/Natchez%20Airline%20MOU%2012-14-09%20FINAL.pdf

I got quite excited about this, until I realised that it said "Air Carriers" and not "Aircraft Carriers" ...

Note the proposal to actively sell the CO2 produced by the synthetic fuel plant as a useful product for EOR purposes.

Meanwhile, Cougar Energy has formed a JV with "Direct Invest" (something to do with German banks I think) for UCG development in China and Mongolia.

http://www.stocknessmonster.com/news-item?S=CXY&E=ASX&N=329928

There is not much detail in the announcement.

Regal Resources adds another "wonder technology" to its portfolio of in-situ hydrocarbon upgrading stuff:-

W10 potentially involves the deployment of an alkaline metal catalyst to “donate” hydrogen to a
hydrocarbon “host” such as coal, oil sands or oil shale, via an exothermic chemical reaction thereby significantly improving the value of the hydrocarbon. The same process may also improve the viscosity of “heavy oil” products such as bitumen derived from oil sands, thereby improving its piping qualities to refineries.

http://www.stocknessmonster.com/news-item?S=RER&E=ASX&N=473959

Should production ever be achieved there are some fairly steep royalties to be paid to the IP owners, some of whom are also directors of the company ...

I really don't know what to make of it all.

Interesting article in the Times today ...

"North Sea coal to be burnt undergound"

The UK Coal Authority has awarded licences to Clean Coal, an Anglo-American company, to develop five offshore sites for a technology called Underground Coal Gasification (UGC).

http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article6949322.ece

Here is Linc Energy's version of the AFC announcement, which is not that much different except for this sentence:

One of the points often missed about UCG, is that UCG is in fact one of the cheapest and easiest producers of hydrogen in the world.

http://www.stocknessmonster.com/news-item?S=LNC&E=ASX&N=216678

I have added a new private UCG company to the header - Swan Hills Synfuels - who are operating in Alberta.

Unbeknown to myself (until now) these guys have already completed a successful trial, at some depth.

Deepest underground coal gasification ever conducted in the world. At 1400 meters below the surface (or 4600 ft) this depth showcases the opportunity to utilize Albertans deep vast coal reserves for future energy production.

From http://www.swanhills-synfuels.com/projects_demonstration.htm

I have decided to add a CCS section to the header. Although dealing with CO2 is not just an issue with coal, it is IMO an essential part of the "Coal 2.0" picture.

No that's excellent. Technology providers who are active in the space are very welcome even if they do not have any coal resources themselves.

I will add AFC and B9 to the header in due course, but in the meantime I believe the B9 Coal presentation qualifies as mandatory reading :-)

http://www.b9coal.com/dl/b9-coal-presentation-of-ucg-november-09.pdf

This is a little on the periphery - so apologies if it is on the wrong thread.

AFC Energy is getting in on the act by selling its fuel cells to Linc Energy for use in UCG. See: http://www.investegate.co.uk/Article.aspx?id=200912080707427494D

Ian Balchin, CEO of AFC said: "Whilst our primary focus remains firmly on the chlor-alkali market, we now have access through B9 Coal to the rapidly emerging market for power generation from underground coal. This opportunity is by far the largest potential market for AFC Energy that we identified and is operational practically anywhere in the world where there are deep coal deposits. The implementation of this programme can create a 'Holy Grail' for future coal utilisation with low-cost, highly efficient conversion of coal into power and through the process of CCS it can turn the dirtiest fossil fuel into the cleanest.

This is significant, just released to the ASX.

"Carbon Energy’s Maiden UCG Reserves Certification"

http://www.stocknessmonster.com/news-item?S=CNX&E=ASX&N=216646

This makes CNX the first UCG company to release a reserve statement based on SPE guidelines rather than JORC. Which means that you get "Petajoules" of gas rather than tonnes of coal. This allows for direct comparisons with the CSG players who quote their reserves in the same manner.

With this initial statement CNX now has a P2 reserve which is roughly equivalent to Arrow Energy's P1 figure.

I have found a Mongolian stock - Gulfside Minerals listed in Canada, duly added to header.

The comments in the latest news release are quite interesting IMO, although they describe UCG as "ICG".

Robert Card, President of Gulfside stated, "We are very pleased to report that the new drill hole data confirms much of the initial Russian/Mongolian exploration data. In addition, the new drilling appears to reveal coal seams that were not previously documented in the Russian/Mongolian exploration program. The deeper seams of significant thickness will allow the company to investigate opportunities to utilize ICG (In-situ Coal Gasification). This innovative process is being pursued more and more by coal companies at the forefront of coal technology"

Once the drilling program has been completed, the Company will be in the position to further analyze the viability of the coal project for a coal liquefaction project. Independent geological and engineering studies will be required to determine if this potential use is technically and economically viable.

From http://www.newswire.ca/en/releases/archive/December2009/07/c8697.html

Header Update:-

Antofagasta duly added to the header, along with another London lister - Alkane Energy.

Well this is a surprise ...

"Carbon Energy signs first international development Agreement with Chile’s Antofagasta Minerals"

http://www.stocknessmonster.com/news-item?S=CNX&E=ASX&N=216569

I suppose I should add ANTO to the header. LOL

You might say it's "overlapped" rather than "stacked". In most Australian states UCG is undertaken under a Mining License whereas CSG (and conventional gas) comes under a Petroleum License. These licenses can cover exactly the same layers of "rock", and it has led to various disputes, notably in Queensland between Linc Energy and Arrow Energy.

In the case of conventional gas vs. UCG I do not believe there would be any problem since it's different layers that are targeted. Obviously it makes sense for any companies drilling the same area to co-operate for practical reasons.

You may note that Central Petroleum make a point in all their presentations of pointing out that they hold both the Mining and Petroleum Licenses over their tenements.

Well spotted though!

For some reason, I've just spotted post #8 on this thread. What I found interesting about it is that the licence area shown appears to be a close match with the PEP11 licence presented by MEC Resources (ASX:MMR) at the last oilbarrel. This licence is illustrated here:

Taken from http://www.adventenergy.com.au/projects/sydney/index.html 

Just for clarification, AIUI MEC operate through a company called Advent Energy, for tax reasons, according to their presenter. The conference report covering MEC is here: http://www.oilbarrel.com/nc/news/display_news/article/conference-report-1-victoria-oil-gas-mec-resources-and-matra-petroleum-open-proceedings-at-oilba/1115.html

What's interesting about this is that Advent's licence/operations are targeting conventional gas. I presume there must be some form of stacked play here, with conventional gas underlying(?) the coal seams.

Cheers,

Mark

OK well I had a read, and unfortunately the darned thing didn't even give any hints as to actual CTL companies in the US. Doubtless that will be in the next exciting installment or something ...

I intend to have a proper dig around in the US and Canada soon.

Meanwhile, I have added yet another ASX outfit to the header. Transol Corporation is one of those vague sort of "investment house" type of companies, but a recent announcement states that it is investing in (and intends to take full ownership of) the company which has the rights to the US-developed Enhanced Biogenic Methane technology in Australia. So it is therefore de-facto a partner in JVs with Regal Resources and Greenpower Energy.

Australia is very incestuous it seems. I will try to keep up ... ;-)

Thanks, I'll have a look. Energy & Capital is one of the better tipsheet operations IMO. Though it's all relative ... ;-)

This is a bit spammy but just in case of interest re: CTL hype in the States: http://www.energyandcapital.com/report/the-new-era-of-coal-investing/153

An update today from CBM Asia regarding the very first CBM well ever drilled in Indonesia.

http://www.marketwire.com/press-release/Cbm-Asia-Development-Corp-TSX-VENTURE-TCF-1085047.html

I can't make much sense out of it, with terminology like "desorption isotherms" and what not. However, what it mostly sounds like is that the local company who is the operator has cocked things up a bit.

Perhaps someone else can illuminate?

Header Update:-

Added Great Eastern Energy Corp., another London lister with a decent market cap, which is doing CBM in India and gets a 'P' :-)

Yes a bit strange. Though not untypical of "internal China" stocks in my experience. Not exactly Transparency 'R' Us ... :-)

For the record I have no positions in any stocks on the list in the header except for Carbon Energy (ASX:CNX), and I expect this to remain the case. I do find the whole "coal as oil" thing quite fascinating though.

I was at the Oilbarrel and found their presentation interesting. However, their main growth story seems predicated on building their own CBM production, for which purpose they have (IIRC) 5 dedicated rigs. So, I asked how many wells they intended to drill in 2010 and what production level they were aiming for in that year. Those seemed like rather basic & non-controversial questions to me... yet they refused to answer them. That seems very odd to me, so I have not pursued further.

Green Dragon Gas was presenting at the Oilbarrel conference last week.

Here is the associated presentation, very interesting IMHO.

http://www.oilbarrel.com/fileadmin/content/pdfs/oilbarrel/Nov26th/GreenDG.pdf

This is interesting ...

Blackham Resources (ASX:BLK) has entered into a JV with "Synfuels China" with respect to their Western Australian "conventional" above-ground CTL project.

http://www.stocknessmonster.com/news-item?S=BLK&E=ASX&N=471884

Blackham’s Chairman, Mr Brett Smith stated “Coal to liquids in China is advancing at a rapid rate, faster than any other country in the world. Blackham is excited about its relationship with Synfuels China and looks forward to working closely with one of the world’s premier CTL engineering and technology firms in the development of the
Esperance Regional Facility.”

The stock is up 45% as I write, with high volume.