Last checked at 28 Aug 2009 07:00
Independent Resources plc ("IRG" or the "Company")
Update on Fiume Bruna
Important steps in the appraisal of Italy's first coalbed methane project
The Company announces an update on the appraisal campaign that is designed to demonstrate commercially-viable gas flows from the Fiume Bruna coal seam.
The Fiume Bruna 1 well reached a total depth of 912.5m RT and has been extensively logged. Unfortunately, the well unexpectedly encountered a 200m sequence of evaporitic sediments of high seismic velocity above the target coal zone. This masked the details of tectonic faulting that caused the main coal seam to be absent at the Fiume Bruna 1 well location and therefore the well will need to be deviated to reach the coal. The well is currently suspended at a depth of 224m (9 5/8" casing shoe), pending the reprocessing of the existing seismic data (to take into account the velocity of the evaporitic sediments) and the acquisition of new seismic data in the appraisal area. This data will be used to define with precision new well locations and the necessary deviation target for Fiume Bruna 1. Drilling operations will resume as part of a multi-well drilling campaign following the seismic operations. This campaign includes drilling up to eight appraisal wells in a representative area of the licence, of which Fiume Bruna 1 is the first.
In addition, the Company's seismic contractor, Osservatorio Geofisico Sperimentale di Trieste recently began acquisition of the second phase of 2D seismic data on the Fiume Bruna Block, covering 46 km in total. The Company has also obtained detailed gravity data coverage of both the Fiume Bruna and the adjacent Casoni license areas. The Company will integrate the seismic and gravity data with the results of this first well to calibrate the structural interpretation and enable the Company to achieve its objective of testing gas from the target coal.
Independent Resources Chairman Grayson Nash commented: "We had hoped to reach all objectives at once with this first well, including flowing gas to surface, but it looks as if we'll have to be patient.
"The primary objective of reliably calibrating our seismic data to a well tie was achieved and this should help deviate this well properly and site the next wells going forward."
The main results of the appraisal campaign to date are:
All data to date confirm and strengthen the previously reported prospectivity.
The integration and interpretation of the gravity data and the available seismic data, including 12 km of reprocessed vintage seismic data and 10.6 km of newly acquired seismic data, show an extensive North-South trending structural basin that represents the core of the prospective area for future coalbed methane ("CBM") development. This area is interpreted to be structurally low, and within it there is the potential for the preservation of coal from post-depositional erosion. Coal mining took place in the past at the northernmost end of this basin.
This elongated basin is flanked to the North-East by a structural plateau of shallower average depth that is interpreted to contribute significantly to the prospective area for CBM development.
The area delineated for appraisal drilling sits on the northern part of the elongated basin, while the above mentioned plateau area is located to the east of the appraisal area.
The Fiume Bruna 1 borehole was the first well ever drilled within this elongated basin area, and had multiple objectives, including exploring the stratigraphy of the thickest possible section of Miocene and Pliocene sediments, providing a reliable tie point with the seismic data, and therefore helping the interpretation of all the seismic data to be acquired in the current phase of licencing.
Chairman Grayson Nash added: "CBM appraisal is a complicated process, designed to demonstrate commercially-viable gas flows, in this case from the Fiume Bruna coal seam. Although we are understandably disappointed that we were not able to achieve more with the first well, the data now in our possession means we are better equipped to execute the process going forward."
The above information has been reviewed and verified by Roberto Bencini, Technical Director of Independent Resources, for the purposes of the Guidance Note for Mining, Oil and Gas Companies issued by the London Stock Exchange in March 2006. Mr. Bencini is a chartered petroleum geologist. He is a member of the Society of Petroleum Engineers, the Geological Society of London and the American Association of Petroleum Geologists.
| For further information contact: | ||
| Grayson Nash | Independent Resources plc | +3906 4549 0720 |
| Allan Piper | Tavistock Communications | 07771 838 753 |
| 020 7920 3150 | ||
| Duncan McCormick | Tavistock Communications | 020 7920 3150 |
| Jonathan Hinton/David Smith | Deloitte Corporate Finance | 020 7936 3000 |
| David Banks | Seymour Pierce Limited | 020 7107 8011 |
| Richard Redmayne | 020 7107 8039 |
Background details follow:
The Fiume Bruna exploration permit was awarded to Independent Energy Solutions srl (a wholly-owned subsidiary of IRG) in 2008.
The Fiume Bruna permit covers some 247 km2, a large part of which is underlain by virgin coal. This generally occurs in one 7 metre thick seam and was the object of mining activity for many years until forced abandonment of mining in the late 1950s due to the coal's high methane content. The mineworkings only touched one small area of the overall coal deposit leaving the rest as potential CBM-producing areas.
The Fiume Bruna licence has an estimated 4.8 billion cubic metres (167 billion cubic feet) of in-place resource, and results from initial testing indicated an estimated recoverable resource of 2.6 billion cubic metres (91.4 billion cubic feet). Longer-term, it also has potential for carbon sequestration, permanently disposing of carbon dioxide (CO2) from nearby sources. At the same time, an estimated additional 1.8 billion cubic metres (63.6 billion cubic feet) of methane would be produced as a result of this injection of CO2.
IRG was admitted to AIM in December 2005 and is pursuing an integrated and asset-backed gas trading business in Italy with midstream components in Italy and upstream components within Italy and in North Africa. Along with Fiume Bruna, these include the planned Rivara natural gas storage facility in the Po Valley, and exploration acreage at Ksar Hadada in Tunisia. The Company aims to pursue this long-term strategy in the most environmentally-sustainable way, by whenever possible incorporating from the outset the permanent geological storage of CO2 into its future commodity production and trading. IRG has focused on building a profitable portfolio through wholly-owned initiatives and partnerships.