Under the agreement, Molopo and its US partner, Foree International, will have the right to explore for and produce CBM from Allegheny coal seams in Fayette County, south of Pittsburgh in Pennsylvania.

Gas is currently produced in this area from hydraulically fractured vertical wells in clastic reservoirs. Well-developed gas transmission infrastructure is also available in this area, Molopo said.

Following the execution of this arrangement, Molopo will hold a 50% interest in about 10,000 gross acres in the US.

The company says it plans to introduce horizontal drilling methods to enhance economics of CBM production from this region.

CBM drilling has been concentrated in the southwest corner of the state, with about 250 wells drilled to date on a northeast-southwest trend through Greene, Fayette and Westmoreland Counties into Indiana County, conforming to the trend of the Appalachian folds.

The newly acquired acreage includes Fayette County’s main coal seams – the Upper Freeport and Lower Kittanning.

Seam thicknesses in the region vary up to about 8 feet (2.4m), while gas content ranges up to 290 cubic feet per ton (9 cubic metres per tonne).

Anticipated high-seam permeabilities are expected to contribute to effective gas drainage, Molopo said.

“The first step in evaluating the potential gas in place and identifying optimal CBM drilling locations will entail construction of seam and overburden isopach maps using logs that were run during the course of conventional gas operations,” the company told the Australian Stock Exchange this morning.

“Corehole desorption tests will then be conducted to determine gas content, gas composition, seam thickness and permeability.”

Depending on test results and their location, some of the coreholes may subsequently be reamed and converted into downdip vertical pump wells for water and CBM production from intersecting horizontal wells.

Molopo says it will continue seeking opportunities to add to its acreage position in the region.