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www.cometridge.com.au ASX Code : COI
www.cometridge.com.au
Comet Ridge’s Galilee Basin Extended Production Test Project Galilee Basin Coal & Energy Conference 2013
Tor McCaul, Managing Director
25 November 2013
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Introduction – Comet Ridge Limited
2
Strategic CSG assets
Large resource and
equity positions
Multi-basin exposure
Significant 3C
Resource base
Domestic and export
market opportunities
Tightening east
Australian gas market
Quality team
Highly experienced
board and management
team
Combines technical and
commercial; CSG and
conventional; upstream
and downstream
capability
Combines experience
with majors and
successful independents
Focus on reserve certification
Initially at Mahalo Block in Bowen Basin with two pilot schemes operating
Galilee Basin has significant gas resources over large area
NSW blocks also with significant resource base and large upside
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Contents
3
Galilee Basin Gas Assets
Extended Production Test
Commercial Options
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Section 1
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Galilee Basin Gas Assets
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Large area (~250,000km2)
covering a big part of central
western Queensland
Overlain by Eromanga Basin
and underlain by Drummond
Basin
Land use is grazing – cattle and
sheep
Oil recoveries and conventional
gas flows over a number of
years
One working pilot in the basin
Significant coal mine province
evolving in the shallow coals in
the east
Galilee Basin – Background
5
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Eastern Basin Geology
6
Betts Creek coals – Permian
in age
Up to 6 individual seams
Thick, continuous coals
deposited over very large area
Coals shown as gas bearing
and permeable
Coal sub-crops in the east
and dips to the west
Net Coal thickness in eastern
basin generally 15 to 40m
Very large gas volumes in
place
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Systematic Path to Reserves
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Galilee Basin Significant Independent Resource Booking
Resources Independently Certified
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Gunn Project Area 3C Gas Resources are material in size (1,870 PJ) and 100% COI
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Large position – almost
13,000km2 (0.7% of QLD)
ATP743
100% equity
12 year term effective
September 2009
~6476km2
ATP744
100% equity
12 year term effective
October 2009
~6515km2
Galilee Exploration History
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2009 Petroleum Exploration Original Tenure Award
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Drilling Program Objectives
Confirm coal thickness, depth
and continuity
Quantify gas content at various
depths
Quantify coal permeability at
various depths
Obtain water samples from the
Betts Creek coals
Better understand Galilee
depositional architecture
Galilee Exploration History
10
2009-10 Exploration Program
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5 well exploration program
Total drilled section 5010m
Coal thickness ranged from 16m
to 24m with up to 22m of shale
Over 1000m core cut & 10
drillstem (flow) tests
Significant laboratory coal
analysis
Gunn Project Area average gas
content 4.3 m3/t (high 7.3 m3/t)
Galilee Exploration History
11
2009-10 Exploration Program
Outcome: focus on south-west region – Gunn Project Area
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Seismic Program Objectives
Confirm coal continuity
Improve understanding of
structural features
Define project area
252km 2D seismic survey
First modern 2D seismic in these
blocks
Excellent image quality in Betts
Creek Beds
Improved understanding of the
structural nose controlling gas
content and permeability
Galilee Exploration History
12
2011 Gunn 2D Seismic Survey
Top Permian
Gunn 2011-03
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2012 farm-in to southern part of
ATP1015P held by QER
Access to additional 825km2
Creates continuous acreage area,
extending Gunn Project area to the
east
Three stages to allow equity up to
75%
Stage 1 completed- two appraisal
wells in Farm-in Area earning 20%
equity
Galilee Exploration History
13
1015P Farm-in Area
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3 well exploration and appraisal
program
Gunn 2 drilled in ATP744 Gunn
Project Area
16.2m net coal
Four coal intervals tested –
demonstrated good to excellent
productivity
2 wells – ATP1015 Farm-in area
20 to 23 m net coal
Good gas content and permeability
Galilee Exploration History
14
2012-2013 Exploration Program
Confirmed extension of Gunn Project Area to the east
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5 coal seams intersected
depth to coal 700-1000m
>16m net coal
gas contents >4m3/t
good permeability within
target coals
Gunn Project Area
15
Gunn Project Area
Gunn Project area
and Farm-in area
coals contain
recoverable gas over
an estimated area of
1865km2
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3 historic petroleum wells within
ATP 743 and ATP 744 recovered
oil and/or gas from Lake Galilee
Sandstone at base of Galilee Basin
Carmichael 1 well flowed gas to
surface from deeper sandstone
intervals
Evidence of active petroleum
system over the Koburra Trough
Potential for additional oil and gas
resources
Additional Gas Potential
16
Conventional and Unconventional Potential
• GTS – recovered gas to surface
• OTS – recovered oil to surface
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Section 2
Gunn 2 Extended Production Test
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Nov 2012 -Gunn 2 completed for
production
Nov to Jan 2013 - Surface facilities
installed - water storage tanks,
flowlines, metering facilities and
power generation
Jan 2013 –commissioned for
operation
EPT Objectives
Establish connectivity with coals
(i.e. completion methodology)
Obtain water samples
Gunn 2 Extended Production Test (EPT)
18
Gunn 2 - EPT
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Gunn 2 – Production Well Design
Betts Creek Coals sit well below Great Artesian Basin units
Steel casing run and
cemented in place
with cement returns
all the way back to
surface
This allows flow into
the well of only the
selected zone(s)
For Gunn 2, only 4
metres of coal
perforated and
flowed into the well
for pumping to
surface
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Perforated over four
metre interval - C1 coal
seam only
Seam isolated above
and below by
impermeable mudstone
Designed to ensure
water only produced
from Betts Creek
reservoir coal
Gunn 2 – Extended Production Test
20
Gunn 2 - EPT
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Water rate progressively
increased over several weeks
Stabilized water production rate
of 400 bwpd
Reached limit of pumping
equipment
Pressure analysis indicate four
metre coal interval has greater
flow capacity
Formation water samples taken
for analysis
Water found to be good quality
Evaluating methods of formation
water treatment
Well set up for long term
production
Gunn 2 – production test
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Gunn 2 – EPT results
Success
• Effective completion style
• Connecting wellbore to fractures in coal
• Isolating coal seam from permeable
sandstones
• Formation water samples collected
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Gunn 2 – Extended Production Test
22
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Agricultural Groundwater
predominantly sourced from
Clematis Group
Moolayember Formation
Alluvium and colluvium
Nil sourced from Betts Creek
beds
Clematis Group and
Moolayember Formation are
intake beds for GAB
Betts Creek beds sit hundreds
of metres below GAB
Groundwater
23
Groundwater over ATP’s
>300m separation between GAB and Betts Creek beds
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Section 3
Commercial Options
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Tightening Eastern Australia Gas Market
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4 large LNG consortia control
almost 90% of 2P CSG reserves
in Eastern Australia
Intensifying competition for
future gas reserves, driven by
LNG growth
Increasing pressure on
domestic gas supply and
pricing
Gas producers writing new
contracts at the higher end of a
A$6-9/GJ range and prices are
forecast to continue to rise
Qld Gas Market Advisor
forecasts a domestic supply
constraint 2015-2020 if supply
situation does not improve
Qld domestic gas demand and projected
gas demand for LNG exports
CSG 2P Reserves,
February 2013
42,776 PJ LNG proponents
AGL
Other
88%
5% 7%
Source: RLMS
Source: 2012 Gas Market Review Queensland (Queensland Government)
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Different market segments
emerging for commercial
development: coal, power, LNG
Development option 1: Power for
coal mines / local generation
Galilee Basin – Commercial Options
26
Galilee Basin market
opportunities
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Development option 2:
Gas supply to LNG
projects at Gladstone
Development option 3:
Domestic gas supply via
Barcaldine
Galilee Basin – Commercial Options
27
Galilee Basin market
opportunities
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Comet Ridge has built significant
eastern basin experience and
understanding, positioned within
reach of markets
Large CSG resources
independently certified and deeper
sandstone gas present
Pilot scheme is the key next step
with the aim of conversion of
resources to reserves
Gas could be directed to power
generation, LNG manufacture or
domestic gas markets
To Summarise……..
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Disclaimer
This presentation (Presentation) has been prepared by Comet Ridge Limited (ABN 47 106 092 577) (Comet Ridge). The Presentation and information contained in it is being provided to shareholders and investors for information purposes only. Shareholders and investors should undertake their own evaluation of this information and otherwise contact their professional advisers in the event they wish to buy or sell shares. To the extent the information contains any projections, Comet Ridge has provided these projections based upon the information that has been provided to Comet Ridge. None of Comet Ridge or its directors, officers or employees make any representations (express or implied) as to the accuracy or otherwise of any information or opinions in the Presentation and (to the maximum extent permitted by law) no liability or responsibility is accepted by such persons.
Summary information
This Presentation contains summary information about Comet Ridge and its subsidiaries and their activities current as at the date of this Presentation. The information in this Presentation is of general background and does not purport to be complete. It should be read in conjunction with Comet Ridge’s other periodic and continuous disclosure announcements lodged with the Australian Securities Exchange (ASX), which are available at www.asx.com.au.
ASX Releases
Investors are advised that by their nature as visual aids, presentations provide information in a summary form. The key information on detailed Resource statements can be found in Comet Ridge’s ASX releases. Resource statements are provided to comply with ASX guidelines but investors are urged to read supporting information in full on the website.
Past performance
Past performance information given in this Presentation is given for illustrative purposes only and should not be relied upon as (and is not) an indication of future performance.
Future performance
This Presentation contains certain “forward-looking statements”. Forward looking words such as, “expect”, “should”, “could ”, “may”, “plan”, “will”, “forecast”, “estimate”, “target” and other similar expressions are intended to identify forward-looking statements within the meaning of securities laws of applicable jurisdictions. Indications of, and guidance on, future earnings and financial position and performance are also forward-looking statements. Forward-looking statements, opinions and estimates provided in this Presentation are based on assumptions and contingencies which are subject to change without notice, as are statements about market and industry trends, which are based on interpretations of current market conditions. Such forward-looking statements, opinions and estimates are not guarantees of future performance.
Forward-looking statements including projections, guidance on future earnings and estimates are provided as a general guide only and should not be relied upon as an indication or guarantee of future performance. This presentation contains such statements that are subject to known and unknown risks and uncertainties and other factors, many of which are beyond the control of Comet Ridge, and may involve significant elements of subjective judgement and assumptions as to future events which may or may not be correct. It is believed that the expectations reflected in these statements are reasonable, but they may be affected by a range of variables which could cause actual results or trends to differ materially, including but not limited to: price fluctuations, actual demand, currency fluctuations, drilling and production results, reserve estimates, loss of market, industry competition, environmental risks, physical risks, legislative, fiscal and regulatory developments, economic and financial market conditions in various countries and regions, political risks, project delay or advancement, approvals and cost estimates. Such forward-looking statements are relevant at the date of this Presentation and Comet Ridge assumes no obligation to update such information.
Investment risk
An investment in Comet Ridge shares is subject to investment and other known and unknown risks, some of which are beyond the control of Comet Ridge. Comet Ridge does not guarantee any particular rate of return or the performance of Comet Ridge. Persons should have regard to the risks outlined in this Presentation.
Competent Person Statement
The gas resource estimates for ATP 774P, ATP 337P, PMP 50100 and PMP 50279 provided in this statement were determined by Mr John Hattner of Netherland, Sewell and Associates Inc, Dallas, Texas, USA, in accordance with Petroleum Resource Management System guidelines. Mr Hattner is a full-time employee of NSAI, and is considered to be a qualified person as defined under the ASX Listing Rule 5.11 and has given his consent to the use of the resource figures in the form and context in which they appear in this presentation.
The resource estimates for PEL 6, PEL 427 and PEL 428 referred to in this presentation were determined by Mr Timothy L. Hower of MHA Petroleum Consultants LLC in accordance with Petroleum Resource Management System guidelines. Mr Hower is a full-time employee of MHA, and is a qualified person as defined under the ASX Listing Rule 5.11. Mr Hower consented to the publication of certain resource figures which appeared in the announcement of 7 March 2011 made by Eastern Star Gas Limited (ASX:ESG) and any reference and reliance on the resource figures for PEL 6, PEL 427 & PEL 428 in this presentation is only a restatement of the information contained in the ESG announcement.
Important Notice and Disclaimer
29
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Comet Ridge Limited Contact Level 3
283 Elizabeth Street
Brisbane 4000
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30
GPO Box 798
Brisbane 4001
Telephone:
Facsimile:
+61 7 3221 3661
+61 7 3221 3668