The well, Port Talbot-1, is the first in a multi-hole Welsh CSM exploration program.
Eden has planned a minimum of three holes in Petroleum Exploration and Development Licence 100 (PEDL100), located between Cardiff and Swansea.
The Australian company’s UK initiative – also Eden’s first exploration program of any kind overseas – will eventually encompass three licence areas covering 430 square kilometres in South Wales.
All of the acreage is effectively unexplored for CSM gas, with the Perth-based explorer planning to drill each area this year.
“The start of drilling is a milestone for Eden,” executive chairman Greg Solomon said today.
“It heralds for the first time in the company’s short history, a potential production opportunity achievable in the relative short term. The drill targets are all close to high demand, high price gas markets and pipeline infrastructure and in a known gas-bearing coal province.”
With the North Sea petroleum province now past its heyday, the UK energy market is now a net importer of hydrocarbons, with a natural gas prices being significantly higher than in Australia, Eden said.
Britain’s large population base also offers both short-term major local customers and long-term opportunities, according to Solomon.
“The PEDL100 licence area hosts several large industrial plants, including a steel works, an insulation manufacturer, a paper mill and a major industrial estate, so the infrastructure situation and project economics are quite different from the typical Australian CSM project,” he said.
“Any successful commercial outcome will also meet preferred environmental guidelines for new energy projects in the UK – production of low carbon emission fuels and new gas supply sources which are low impact developments.”
Eden’s Welsh drilling campaign will seek to quantify the critical parameters of gas content and seam permeability needed to prove up the potential of methane volumes trapped in the coal seams around southern Wales.
The results of the drilling will be used to determine a location for Eden’s first pilot CSM project.
Eden is earning a 50% interest in PEDL100 from licence holder, Coastal Oil and Gas, a wholly owned subsidiary of UK Onshore Gas Group.
The first exploration well, Port Talbot-1, will be drilled 650m into the highly gaseous Westphalian coal seams of the South Wales Coal Basin, 220km from London. Significant coal seams intersections are expected between 350m and 640m.
“There are very significant amounts of coal remaining in PEDL100 and at optimal depths for CSM gas extraction, that are more than sufficient to underpin a number of individual CSM projects,” Solomon said.
The total Welsh drilling schedule, gas content analysis and permeability test work is expected to take until at least October.
