In late-2004, an independent engineering report estimated the proven, probable and possible reserves across three of the Kansas projects at more than 142Bcf, a figure that was on the verge of being updated as RESOURCESTOCKS went to print. Resource potential across the company’s other projects has been estimated at 113Bcf.
In a sector of the oil and gas game in which expertise is at a premium, Admiral Bay has assembled an impressive team of individuals who have long been involved with CBM.
In addition to the skills of Tedesco, Admiral Bay has at its disposal the services of Rod Guice, a petroleum engineer with more than 25 years oil and gas experience who has worked on CBM projects throughout the US, and exploration vice president Connie Knight, a 27-year veteran of the industry with particular expertise in naturally fractured reservoirs.
“We’ve got a good solid team with more than 100 years experience in CBM, and that really sets us apart from a lot of CBM companies.
“They’re typically made up of people who have been in one industry or another, who have always worked in conventional oil and gas, and we see that probably 80-85% of the companies that call themselves CBM companies tend to stumble.
“CBM is a very specific type of project and you need people who are experienced at doing it.
“From that standpoint, we have an exceptional management team and a range of projects that in the long run are going to benefit not just the management but also the shareholders of the company.”
While CBM has only just moved out of its infancy in Australia, it has a comparatively long history in the US, where it currently caters for 10% of the nation’s total energy demands. Some estimates predict that CBM’s share of the energy market will grow to as much as 30% by 2010. The decline of US conventional gas reserves has made CBM production increasingly important, as evidenced by a spate of hefty takeovers of mid-sized CBM players in recent years.
CBM player Prima was valued at around $US150 million in late-2003, but was acquired by PetroCanada just three months later for $US500 million. Such was the proven consistent nature of Prima’s ground, says Tedesco, that PetroCanada valued each drill location as it would a producing well.
Admiral Bay, which currently has a market cap in excess of $US53 million, still has a way to go before it can claim such surety about its ground, but should it reach its production targets it will firmly force its way on to the radar screens of the big boys.
* This report, first published in the September/October 2005 edition of RESOURCESTOCKS magazine, was commissioned by Admiral Bay Resources
