Pacrim’s sampling program recently carried out on PEP38521 on the west coast of the South Island has revealed methane concentrations with a mean value of 3,081ppm and a maximum value of 15,451ppm.

Pacrim managing director Rodney Foster said 304 augered soil samples were collected from around one metre depth.

“Samples were analysed by a specialist laboratory in Denver, USA, Gallagher

Research & Development Company, Inc. (GRDC),” Foster said.

“They have reported that the methane values are the highest ever recorded by them in 23 plus years of operation. “These values are higher than GRDC has observed in any coal-bed methane areas they have worked on in the US.”

However, the gas was probably primarily biogenic rather than coal-bed methane, Foster told EnergyReview.net.

“The interpretation is that the gas is coming from organic breakdown in a thick pile of carbonate rock rather than from coal measures,” he said.

Acccording to Foster, the gas anomaly is open-ended in every direction and GRDC has reported that the gas signatures strongly indicate the potential for a significant commercial accumulation of biogenic natural gas.

The company was now trying to identify and define traps in the area in order to establish drilling sites.

“Two wells were drilled in the permit area by American Superior Oil Company in 1942,” Foster said.

“The wells were designed to test for oil on what is now called the Fireball Creek anticline. Both wells encountered shallow gas, essentially methane. The second well tested through perforations at 6 million cfg/d before settling at 2.5 million cfg/d from a six-metre interval from 250-256m.

“The Fireball Creek anticline was mapped by American Superior using surface geology and data from several shallow stratigraphic core holes. Interpretations of geological and seismic data indicate that the Fireball Creek anticline could contain 5 bcf to 14 bcf of gas, with a possible upside of 28 bcf of gas.”

There were also likely to be other gas-rich stratigraphic traps in the area, he said.

Discussions were underway with power generation companies regarding joint venture proposals to accelerate a drilling program, according to Foster.

“A joint venture would operate the well, though some direct contribution in lieu of cash could be made including generating consents and setting up the

drilling sites,” he said.

“Further geochemistry may be undertaken to refine well locations.”

PEP 38521 was granted 30 March 2004. The permit is centred 20km south- southeast of the town of Greymouth, originally covering 173 square kilometres. An application was recently lodged with New Zealand Crown Minerals for an increase in the permit area to the west and south of the existing boundaries, for a total area of 326 square kilometres.

Pacrim Energy’s interest is 35% free-carried through the first two years of the permit, but it will pay its share of exploration costs related to the area increase. US companies Gallagher Research and Development Company Inc and Labrador Oil Company, EF Durkee and Associates (Philippines) and the operator, McKenzie Petroleum Limited (New Zealand) each have a 16.25% contributing interest.