Terrawest commits to drilling of up to 3 CBM wells in its Junggar Liuhuanggou
PSC
TSX.V Symbol: PTR
VANCOUVER, May 30 /PRNewswire-FirstCall/ - Terrawest Energy Ltd. (TWE), is
pleased to announce it has committed to drilling 3 exploratory test wells to
evaluate coalbed methane resources (CBM) on its 655 sq km (253 square miles)
Production Sharing Contract (PSC) acreage in Liuhuanggou area of, Xinjiang
province, P.R. China. (See figure A for Project Map) One of the test wells
will drill deep into the Jurassic Badaowan Formation for initial exploration
of the prospective coal seams in this formation and evaluate other sand
formations with gas potential. TWE did not test the deeper Badaowan coal seams
in previous drilling in 2006. The total drilling commitment in this program
will not be less than $1.5 million US and the Company anticipates commencing
drilling before the end of next quarter ending September 30, 2008. Geological
and engineering evaluations are currently ongoing and drilling locations have
already been identified and visited by Petromin's engineer, Ryan Adams and TWE
representatives. Drilling contractors have now been interviewed in China in
preparation for the implementation of the 2008 drilling program in Xinjiang
Province, P.R. China.
TWE holds 47% of the Liuhuanggou PSC signed between Terrawest and China
United Coalbed Methane (CUCBM) in December, 2005. The PSC is on a PetroChina
lease area and represents the first and only foreign CBM PSC signed on a
PetroChina lease block in China. TWE is operator. Three drill holes were
previously drilled in the acreage and intersected coal seams with an aggregate
thickness of over 40 meters. Gas desorption from the drill holes indicated a
gas content of 65-100 Scf/ton. Preliminary calculations indicated more than 8
Bcf per square mile (section) of gas potential in the areas where the
intersected coal seams are well developed. As indicated, this gas potential
does not include the deeper Badaowan formation coal seams.
To encourage the development and production of domestic CBM, the Chinese
Government has: 1) waived value-added tax on CBM gas production, 2) given CBM
gas priority over conventional gas for pipeline access and 3) granted a price
subsidy for CBM gas sales. The PSC is located on the southern margin of the
Junggar sedimentary basin, which is a productive petroleum and natural gas
region considered highly prospective for CBM based on the extensive coal
resources. There are a number of active coal mines in the southern sector of
the Junggar basin and new CBM exploration projects have been recently
announced.
There is an existing natural gas pipeline infrastructure in the vicinity
of the Terrawest PSC that carries conventional natural gas to the nearby
provincial capital city of Urumqi, and links the area to the major
trans-national West-East pipeline. The Junggar Basin is targeted for further
oil and natural gas pipeline development. The preliminary estimate of CBM
potential for the whole Junggar Basin, as reported by CUCBM, is 69 Tcf (approx
2 Trillion cubic meters).
Petromin Resources is a major shareholder in TWE and provides management
and other services under the terms of a management services agreement.
On behalf of the Board of Directors,
A. Ross Gorrell
Co-Chairman and President
Please click here: http://files.newswire.ca/721/TWEDRILLING.pdf to see
2008 Planned Drilling
CONTACT: Petromin Resources Ltd., 390-1090 W. Georgia St., Vancouver,
B.C., V6E 3V7, T. (604) 682-8831, F. (604) 682-8683
SOURCE Petromin Resources Ltd.
Petromin Resources Ltd., 390-1090 W. Georgia St., Vancouver, B.C., V6E 3V7, T.
(604) 682-8831, F. (604) 682-8683
