Pacific Asia China Energy Inc. updates shareholders on its CBM pilot project at Guizhou in south-central China. In addition, the Company is greatly encouraged by recent new developments in the emerging CBM sector in China, as highlighted below.
At Guizhou, the Company is conducting a pilot production test comprising three vertical wells located in the Zhongyi region of the Mayi block. The Mayi block comprises 138 km2 within the overall 970 km2 Guizhou concession. The Company's geological and engineering consultant, Sproule International of Calgary, in accordance with Policy NI 51-101 and the COGE Handbook, estimates a "Most Likely Case volume of discovered CBM resources in place" at 5.2 TCF for targeted coal seams 17-1, 17-2, and 19, having an aggregate thickness of 9.2 m distributed over the Guizhou project area. (Source: Sproule International, "Study of the Discovered CBM Resources in the Baotian-Qingshan Property, Guizhou Province, People's Republic of China, as of December 31, 2005) The pilot production test will enable the Company to more accurately estimate a gas resource, and model an expected production profile.
The first pilot well, ZY-04-1, was recently completed and logged. ZY-04-1 cored several target coal seams with accompanying desorption and coal quality testing. Total coal thickness is 23.2 m in 6 seams thicker than 1 m (range 1.9 to 6.6 m) at depths from 557 m to 809 m. Average gas content in 12 fully-desorbed samples from 6 seams is 320 scf/t (as-received basis). Three samples continue desorbing. Initial results from the ZY-04-1 well are consistent with results obtained in the 2006 exploration program when 6 fully-cored slim holes were completed and tested in the Zhongyi and Mayi areas. Drilling, logging and cementing have been completed at the ZY-04-2 well to a depth of 851m. The third well, ZY-04-3 will begin drilling within a few days. On completion of the third well, target seams will be selected for fracc stimulation and production testing which is expected to take place by late November.
As part of the exploration planned for 2007-2008, a three hole core well program has recently begun in the Lohan region, located north of Mayi. Drilling is scheduled for completion during the final quarter of 2007. This program represents the first phase of exploration on the Lohan block. Data from this test program will enable the Company to evaluate the volume of coalbed methane gas (CBM) present, and help assess the commercial viability of extracting the gas. Key production factors including reservoir pressure, coal permeability, gas content and composition, and coal saturation will be evaluated. All coal seams will be cored with desorption and associated analyses.
At Guizhou, the Company is conducting a pilot production test comprising three vertical wells located in the Zhongyi region of the Mayi block. The Mayi block comprises 138 km2 within the overall 970 km2 Guizhou concession. The Company's geological and engineering consultant, Sproule International of Calgary, in accordance with Policy NI 51-101 and the COGE Handbook, estimates a "Most Likely Case volume of discovered CBM resources in place" at 5.2 TCF for targeted coal seams 17-1, 17-2, and 19, having an aggregate thickness of 9.2 m distributed over the Guizhou project area. (Source: Sproule International, "Study of the Discovered CBM Resources in the Baotian-Qingshan Property, Guizhou Province, People's Republic of China, as of December 31, 2005) The pilot production test will enable the Company to more accurately estimate a gas resource, and model an expected production profile.
The first pilot well, ZY-04-1, was recently completed and logged. ZY-04-1 cored several target coal seams with accompanying desorption and coal quality testing. Total coal thickness is 23.2 m in 6 seams thicker than 1 m (range 1.9 to 6.6 m) at depths from 557 m to 809 m. Average gas content in 12 fully-desorbed samples from 6 seams is 320 scf/t (as-received basis). Three samples continue desorbing. Initial results from the ZY-04-1 well are consistent with results obtained in the 2006 exploration program when 6 fully-cored slim holes were completed and tested in the Zhongyi and Mayi areas. Drilling, logging and cementing have been completed at the ZY-04-2 well to a depth of 851m. The third well, ZY-04-3 will begin drilling within a few days. On completion of the third well, target seams will be selected for fracc stimulation and production testing which is expected to take place by late November.
As part of the exploration planned for 2007-2008, a three hole core well program has recently begun in the Lohan region, located north of Mayi. Drilling is scheduled for completion during the final quarter of 2007. This program represents the first phase of exploration on the Lohan block. Data from this test program will enable the Company to evaluate the volume of coalbed methane gas (CBM) present, and help assess the commercial viability of extracting the gas. Key production factors including reservoir pressure, coal permeability, gas content and composition, and coal saturation will be evaluated. All coal seams will be cored with desorption and associated analyses.
