FTO.L Regulatory News (FTO)

29 Jan 2007 07:02

Fortune Oil PLC29 January 2007 FORTUNE OIL PLC ("Fortune Oil" or "the Company") Geology Study Doubles Estimated CBM Resource at Liulin Further to the announcement issued on 22 January 2007 Fortune Oil is pleased toannounce the results of a comprehensive geological study of Liulin CBM blockcommissioned by its subsidiary Fortune Liulin Gas. The study was undertaken bythe Shanxi Coal Bureau, the governmental institute responsible for most of thecoal geological analysis in Shanxi Province and which is rated A-class (the topcategory) by government authorities. The study concludes that the Liulin block has estimated Gas In Place ("GIP") of40.5 billion cubic metres (1.4 trillion cubic feet). This is almost double the23 billion cubic metres resource that was estimated in an earlier Chinesegovernment study, and as initially informed to shareholders. The recent studyanalysed data from 124 coal coreholes and 13 CBM exploration wells in the area,of which 71 coal holes and 6 CBM wells were in the 200 square kilometre Liulinblock, and many of which had been drilled since the earlier study. The analysisdid not include the two CBM exploration wells recently drilled by Fortune LiulinGas, the results of which are not yet available. The calculation of GIP used aCBM volumetric analysis that is standard in USA and China. The average methane content found in the coal bed gases was 91%, based on 123samples. The CO2 content averaged 3.9% and, after treating for the necessaryremoval of CO2 and water, the gas quality would meet pipeline natural gasrequirements. The desorbed gas content of the main seams is typically between10 and 14 cubic metres per tonne of coal, which is high although undersaturatedrelative to the isotherm. The gas in place was estimated using the known thickness of the coal seams downto seam 10, which is at a depth of 500 metres to 1000 metres below ground. Allthese gas resources are therefore potentially accessible. The study confirmsthat the Liulin block contains a significant CBM resource, however there is notyet any calculation of producible reserves. Actual gas recovery will be subjectto the in-situ coal permeability, ground conditions and local coal mining aswell as the need to de-water and develop each main seam in turn. Further announcements will be issued when more field results become available. Enquiries: Fortune Oil PLCJohn Pexton - Deputy Chief Executive Tel: 00 852 2583 3113 (Hong Kong) Pelham Public RelationsArchie Berens Tel: 020 7743 6679 or 07802 442 486 This information is provided by RNS The company news service from the London Stock Exchange