Coal Seam Gas Projects
Westralian Gas & Power Ltd (WGP) and associated company Red Mountain Pty Ltd currently hold the majority of the petroleum licenses over the prospective coal seams in Western Australia – a total ten Petroleum Exploration Permits and two Mineral Exploration Permits.
These are in two areas: in the south west of Western Australia centered around the Busselton -Margaret River district, and north of Perth in the Mid-West, the hub of the State’s new resource district.
At present WGP is the only participant in the Coal Seam Gas industry in this vast State. The Company is committed to developing an economically viable energy resource.
The Company has conducted a number of comprehensive seismic survey programs across many of its permits. Drill sites have been identified and applications submitted. The drilling program will facilitate study of the underlying geology. The Company has worked closely with Bunbury Drilling Company to effect modification of their drilling rigs to comply with existing requirements.
Joint Venture with Oswal Resources Pty Ltd
The Company is in joint venture with Oswal Resources Pty Ltd to jointly explore the Company’s leases in the onshore Perth and Collie Basins. Work is being undertaken through a joint venture company known as Oswest Energy Pty Ltd (Oswest). This will add new drive to the Company’s exploration activities over all of its Onshore Permits as well as leaving it free to expand into new energy ventures.
Oswal Resources Pty Ltd is the family owned resource investment company and part of Oswal Group Global, a diverse group of companies with interests in petro chemicals, property, shipping, energy as well as engineering and construction.
Under the terms of the Joint Venture Agreement, Oswal Resources Pty Ltd will fund 100 percent of the exploration on the Company’s leases in Southwest and Midwest Western Australia to a bankable feasibility, to earn a 75 percent interest. Exploration of the Mining and Petroleum Leases is to include, coal, coal seam methane gas, conventional hydrocarbons and the prospects of underground coal gasification. The agreement included payment of $200,000 to the Company and provides for reimbursement over three years of the company’s previous exploration costs to a maximum of $2.5 million, commencing 12 months after the transfer of all the Titles to Oswest.
Establishment of a producing Coal Seam Gas source, including well development and gas production testing, can take several months. In general, once a flow of gas is established from a well it is expected to continue for at least 7 to 12 years.
The discovery of a sufficient quantity of Coal Seam Gas will give the Company the option to establish a series of power stations throughout the area in order to supply electricity, or to negotiate the supply bulk gas through one or more take-off agreements, or both.