Can anyone translate this NR?
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For Immediate Release, January 17, 1999
REPORT ON COALBED METHANE PROJECT RECEIVED
BPI INDUSTRIES INC. (the "Company") (BPR - VSE) is pleased
to announce that it has received a independent report on
the Company's coalbed methane ("CBM") project in southern
Illinois. The report was prepared by D. Keith Murray &
Associates ("DKM&A"), professional geologists, of Denver,
Colorado.
The CBM project is comprised of approximately 44,000 acres
in the Illinois Basin of southern Illinois. BPI holds a 49%
interest in the "income stream" which is treated as a
working interest under a joint operating agreement.
To date, the Company has invested in excess of US$3.4
million in this project. An in-depth test program included
the drilling of 18 wells in the upper level coal beds and
one deep well into the New Albany Shale. Extensive testing
was completed on the various wells which included a Coring
program, Permeability tests, Desorption tests, CT Imaging,
Diffusivity testing, Geological Analysis and Pump/Flow
tests.
Two major pipelines (the Texas Eastern Transmission Corp. &
Trunkline Gas Co.) cross the leasehold.
D. Keith Murray reports:
The southern portion of the Illinois Basin, in which the
subject project is located, contains the thickest overall
coal-bearing section and the highest rank coals (high
volatile A Bituminous) occurring in the Carbondale and Spoon
formations. The in-situ gas content in many of the coal
beds in this project, for which the desorption data has been
obtained, is higher than most of the gas desorption values
published to date for the Illinois Basin, even though no
sustained commercial volumes of CBM have been reported in
the Basin.
DKM&A states that CBM production in the Cherokee Basin in
southeast Kansas, which began in 1995, is considered the
best analog (comparison) for CBM production in the southern
portion of the Illinois Basin.
The following is a summary of tests conducted and their
findings:
FLOW TESTS : The production tests were completed on 4 wells,
each having only a single seam hydraulically fractured.
There are 7 different coal seams averaging 33.5 feet in
thickness. The flow tests ran for a period of 58 to 102
days. The wells produced 14 to 27 MCF (thousand cubic feet)
of gas per day from the single seam and 12 to 500 bbls of
water per day.
DESORPTION TESTING : From core desorption testing, gas
samples recovered indicated a methane content of 95.9 -
99.5%. Heat content analyzed from the samples ranged
from 929 to 987 Btu/scf.
NEW ALBANY SHALE TEST : DKM&A suggests that the in-place
gas of 2.71 BCF (billion cubic feet) per well per 160 acre
unit, is reasonable and the resource was calculated using
acceptable methodology.
ADDITIONAL TESTING :
- Xenon gas injection test indicated good permeability
development.
- Injection/falloff analysis indicated positive
permeability from 3.34 - 46.8 md. (millidarcies)
- Rock Mechanics testing was conducted by Halliburton
Energy Services. Results indicated the open nature
of the natural fracturing of the coal.
- A detailed Coal Analysis Program was conducted by
TerraTek of Salt Lake City. The samples of the
high-volatile A bituminous coal received were gas
saturated.
DKM&A have calculated the gas-in-place for the 7 coal beds
mapped and tested within the 44,000 acres at 184 billion
cubic feet.
DKM&A have also calculated the "speculative in-place
resource" of natural gas in the fractured New Albany Shale
is approximately 73 BCF within 4,300 acres of oil & gas
rights held in the project area. It should be noted that
if the gas per unit area is similar in the whole 44,000
acres, then these figures would be increased by a factor
of ten.
The combined gas-in-place resource for the project is
calculated at 257 BCF (billion cubic feet). DKM&A assumed
a conservative recovery factor of 65%, while the project
operator believes that a recovery factor of 75% or higher
is possible.
The average market price of gas for the last 24 months has
been US$2.15/MCF
In light of the gas resource indicated by the Test Program
carried out on the project to date and confirmed in
D. Keith Murray & Associates report, management is extremely
enthusiastic about the future of the coalbed methane project
in southern Illinois. Management, in conjunction with the
Operator, now plans to pursue several funding options
available to finance and develop the previously recommended
76 well drill program. The Company also proposes to actively
pursue the acquisition of additional acreage in the project
area as recommended by the consultants and will be
initiating a detailed review of expenditures to date, to
determine costs and how they are applicable to the future
development plans.
ON BEHALF OF THE BOARD OF DIRECTORS
"John C. Loretto"
John C. Loretto, P.Eng
President
For Further Information Contact
800-803-3204 or 604-685-8688
info@bpi-industries.com
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