These reserves comprise proven reserves of 9.4 bcf gross and 7.1 bcf net, and additional possible reserves of 5.9 bcf gross and 4.9 net.
The Oriva Project, consists of 505 net hectares in two project areas, Oriva Throne, which is already in production, and Oriva Federal, currently in the permitting phase.
Oriva Throne is currently producing CBM gas from the Felix, Smith, Anderson and Wall coal seams at about 13,750 mcf per month which is expected to increase to 50,000 mcf per month.
Planet Gas’ has a 75.975% working interest (60.78% net revenue interest) in 15 producing wells. The Oriva Throne leasehold interest is subject to a 20% land/mineral owner royalty and the project is operated by Emerald Operating Company and Rocky Mountain Exploration (EOC-RMEI), which has the remaining 24.025% working interest (19.22% net revenue interest).
The Oriva Federal Project is currently being permitted for the development of 33 CBM wells with production from the same coal seams as on the adjoining Oriva Throne area. The company’s has 100% working interest (85.5% net revenue interest), subject to a 12.5% mineral owner royalty and a 2% overriding royalty.
“The proximity of the Oriva Throne Project to the Company’s Oriva Federal Project is of strategic importance, not only for the addition of reserves but to the overall project development with access to existing infrastructure and operations,” Planet Gas said.
“In addition to the above reserves, a potential gas resource of 6.0 BCF (gross) and 3.9 BCF (net) is projected in the deeper Moyer Coal Seams at depths of approximately 750 metres. Within the past couple of months EOC-RMEI have completed a well to begin initial production testing of these deeper coal seams.
Earlier this week, Planet Gas released its preliminary final report for the year ended 31 December 2004, the company’s first year as a public listed entity.
Its prospectus, dated 9 January 2004, led to the raising of $15 million in new capital, and its shares began trading on the ASX on 11 March 2004.
Planet Gas reported a net loss $17,703 and revenues of $609,124 for the year.
In 2004, the company acquired five US CBM projects, increasing the Planet Gas' US tenement position by 400%.
It also participated in the completion of 20 wells by two joint venture partners at East Esponda, Wyoming for near-term CBM production and the drilling of eight stratigraphic wells and commencing permitting for 50 production wells at West Esponda.
2004 also saw Planet gas achieving first CBM production from 15 production wells at Oriva Throne, commencing permitting for 11 multiple well locations at Oriva Federal, and drilling seven stratigraphic wells in preparation for further development at Skull Creek, Kansas, USA.
Back in Australia, Planet Gas started an 18 stratigraphic well drilling program at Gippsland, Victoria.
“The board intends to aggressively pursue further acquisitions of near term production assets and to develop the company's existing projects to production as rapidly as possible, particularly in the USA where CBM is sold at a multiple of the prevailing price in Australia, while capital and operating costs are comparable and pipeline infrastructure is significantly superior,” Planet Gas said.
