Wednesday, 6 May 2015

Metgasco still a long way from recovering ground lost

Now that the post-Supreme Court judgment market speculators have moved on, coal seam & tight gas explorer and wannabee production company, Metgasco Limited, is watching its ordinary share price start to fall once more.

 Graphs from the Australian Stock Exchange, 5 May 2015

Typically this company's 'lack of charm offensive' continues in this letter to the Editor of The Northern Star on 2 May 2015, in which it is incorrectly asserted that an exploration licence is similar to a land title and that the type of gas expected from the Rosella well is purely 'conventional' gas*:

Confusion reigns

ATTENTION Mr Laurance Axtens:

There seems to be some confusion about NSW resource management.

NSW's mineral and resources are owned by the state, not individuals or selective local communities.

It is the responsibility of the State Government to manage these resources in the interest of all people in NSW. People living in Byron Bay and Balmain, who by the way have no gas potential in their areas and will not be affected in any way by gas development around Casino, have no more rights to impose their views on resource development than any other NSW citizen or community.

NSW Governments of both political persuasions have awarded and renewed exploration licences to Metgasco over a period that exceeds 10 years. These exploration licences are like a title, similar to a farmer's title to his land, and entail both exploration rights and obligations. The licences (titles) need to be respected.

Please be aware that the democratically elected NSW Government has acknowledged the need for gas and is developing a new NSW gas plan accordingly. Please also be aware that the gas industry enjoys strong support from both the LNP and Labor party at federal level. The NSW Labor position is at complete odds with its federal counterpart and seems to be little more than a cynical, short term expedient.

Please also note that Metgasco is exploring for natural gas in conventional, tight rock and coal seams. I presume from your open letter that you support "conventional gas" and hence our plans to drill the Rosella well.

By the way, given that so much of the world and Australia's gas already comes from coal seams, shales and tight gas, the word "unconventional" is becoming less and less relevant. For example, one third of the gas we currently use in Eastern Australia is coming from coal seam gas wells.

Managing director

* Metgasco holds PEL 16, which is located in the Northern Rivers of New South Wales. On 6 February 2014, the OCSG approved Metgasco drilling an exploration well targeting conventional and tight sands gas at Bentley, located between Casino and Lismore [NSW Office of Coal Seam Gas, 26 June 2014]

The Rosella well is testing for gas in conventional and tight gas rocks....if we find gas it will be like the gas in the Kingfisher well, almost entirely methane. [, 6 May 2015]
Unconventional gas is trapped in formations that are atypical in terms of their geological location and characteristics. Recovering these resources requires the use of techniques designed to "untrap" the gas.

The term "unconventional gas" actually covers three main types of natural gas resources: shale gastight gas and coalbed methane (also known as coal seam gas). Conventional and unconventional gases differ not by their chemical compositions (they are all natural gas) but rather by the geological characteristics of their reservoir rock.

Hydrocarbons (mainly natural gas, but some oil as well) are trapped in subsurface formations called "reservoir rock." Despite the word’s connotation, however, these are not huge, continuous "pools" but rather minuscule pores between the grains that make up the rock matrix.

The quality of a reservoir rock is determined by its porosity and its permeability.

Porosity is the void space between the grains, and thus represents the rock’s capacity to contain fluids (liquid or gaseous hydrocarbons). A highly porous reservoir rock therefore can contain a large volume of oil or gas. But porosity alone will not suffice: the fluids must be able to flow, meaning that the pores must be interconnected. This characteristic, called permeability, is the measurement of the rock’s ability to permit the flow the oil or gas.

Tight gas is trapped in ultra-compact reservoirs characterized by very low porosity and permeability. The rock pores that contain the gas are minuscule, and the interconnections between them are so limited that the gas can only migrate through them with great difficulty. [, 6 May 2015]

Tight gas, like shale gas, requires large quantities of water for fracking [Parliament of Victoria, research paper]

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