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NE BRITISH COLUMBIA Hudsons Hope Gas, Ltd. Introductory key points Background / History Project partners Location / Setting Coalbed gas resource Technical/

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Presentation on theme: "NE BRITISH COLUMBIA Hudsons Hope Gas, Ltd. Introductory key points Background / History Project partners Location / Setting Coalbed gas resource Technical/"— Presentation transcript:

1 NE BRITISH COLUMBIA Hudsons Hope Gas, Ltd

2 Introductory key points Background / History Project partners Location / Setting Coalbed gas resource Technical/ Operational Approach Present status Stakeholder / First Nations aspects

3 First commercial coalbed gas production in BC Very large CBG resource in NE BC BC Government incentives very important Hudsons Hope community and stakeholders play important role in project success

4 50,000 + acre tenure position Western edge WCSB Gething Formation coal measures Near town of Hudsons Hope & inside its District Municipal Boundaries Land use – Mix of agriculture & forested Crown land

5 Peace River CBG Project From: Coalbed Methane Potential in British Columbia – BC MEMPR

6 Hudsons Hope ( Approx town area) Drilling Licence PNG Lease Spectra Energy Pipeline

7 JVA – Two partners, each holds 50% WI GeoMet, Inc. (NASDAQ: GMET) E & P company - CBG primary emphasis Corporate HQ – Houston; Operations center- Birmingham CBG production & development programs in Alabama, Virginia, West Virginia and British Columbia Operator of Peace River Project ( through Hudsons Hope Gas, Ltd….GeoMet Canadian subsidiary) Under JV, GeoMet 50% WI includes natural gas rights from surface to bottom of Gething coal measures Canada Energy Partners (TSX-V: CE) Exploration & Development company – HQ in Vancouver Good land position in areas of multi-zone potential in NE BC Participates in multiple JV projects

8 Peace River Corp (PRC) –First Drilling Licences in 2001 PRC initiated exploration/testing and community, First Nations Engagement Several test wells drilled by 2004; additional DLs JV with GeoMet in 2004 Hudsons Hope Gas, Ltd (HHG) - Canadian subsidiary of GeoMet, became Operator of Record PRC merged interests with Canada Energy Partners HHG drilled additional wells – Core, production test & water disposal First commercial CBG production in BC – December 08

9 Geologic Setting – Hudsons Hope area at extreme western edge of W. Canadian Sedimentary Basin - Tenure located east of disturbed belt Courtesy of: Barry Ryan

10 Approx HHG Tenure

11 Gething Formation – Lower Cretaceous cyclothemic coal measures Numerous well-cleated, bright coal seams Predominately High-Vol A and Med-Vol bituminous Cumulative thickness – project average 15 m Typical Gething thickness of 200 to 300 m Shallowest coals at 300+ m; deepest < 1000m Average gas content – 400 scf/ton CO2 varies widely in Project area – Avg 10% in producing area Gething overlain by 150 – 250 m marine Moosebar Shale

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14 Exploration confirms very large gas resource Project Gross GIP – Estimated at > 1 Tcf GeoMet Working Interest (From2/12/09 Press Release) The Peace River project is the first commercial coalbed methane project in British Columbia, Canada and there are no other similar producing analogies in the region. As a result, initial proved developed reserves of only 4 Bcf were booked in However, an additional 22 Bcf of probable reserves were estimated for the project by DeGolyer and MacNaughton. Note: This does not take into account estimated reserves for at least 200 additional developable well locations.

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16 Exploration phase Wireline coreholes - geology / desorption testing Production test wells cased and fracced for extended dewatering/production testing Several zones in various parts of tenure evaluated for deep disposal potential 22 test wells drilled from 2002 – 2008 Most wells drilled on small pads – 100X100 m Production test wells Surface casing set below fresh water zones 5 ½ production casing set below bottom coals Multiple zones perforated & fracced Frac types included slick water, nitrogen foam, x-link gels and linear gels Wells equipped with down hole pumps and dewatered for several months test gas & water volumes & quality

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19 Production Phase First production stage – Focus on SW part of tenure Future wells to be drilled during Summer/Fall Reduces cost & provides Summer Drilling credit Installed infrastructure for 8 production wells Electric power grid Low pressure gas gathering and produced water transport lines Gas and water – HDPE pipe buried in same trench Gas/water/electric power lines and access roads all installed inside 18 m permitted corridor Produced water piped to disposal well in south part of tenure Disposal zone – Baldonnel Formation Constructed compressor/treatment plant in SW tenure 4-stage compression to meet Spectra Energy pressure specs Gas treatment – CO2 removal (Membrane system) High pressure steel line to Spectra Energy transmission line Plant and first of the 8 wells went on line late Dec 08

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22 18 m

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25 Eight wells on Production-Active status Gas production in early April Five wells: Production ranging 29 to 155 mcfd One well – Early peak of > 200 mcfd Three wells: Early dewatering stage – several mcfd Water production in early April All wells producing water Production ranges from 50 – 268 bpd

26 Local government / Community HHG works closely with District Municipality & community to communicate plans and address concerns Public meetings & targeted engagement at all stages HH Mayor & Council and Custodians of Peace Country provided effective forums for community engagement Community concerns at early project stages evolved into better understanding of & much wider acceptance of project Engagement continues as critical aspect of HHGs presence in community What are key components of HHG success in Hudsons Hope? Community willingness to listen & give HHG chance to earn their trust HHG listens to concerns and looks for ways to mitigate/reduce them Community recognition of economic growth & sense of fairness re potential impacts

27 Private Landholders Whether agreeable to use of property or not: Concerns include interference with operations, loss in property value, impact on lifestyle and aesthetics Bottom line – Want to be treated fairly How neighbors are treated is important HHG listens and respond to concerns Consistent, documented approach to access agreements & compensation Flexibility in location and construction of wells & infrastructure Looks for ways for landholder to benefit Responds to questions and problems immediately Looks at impact on community around landholder and works to mitigate potential impacts

28 Project Tenure in First Nations traditional lands West Moberly Saulteau Halfway River McLeod Lake (Project tenure south of Peace River) HHG Engagement of First Nations Early in each project stage – solicits input into planning Follows OGC Consultation process & evolving provincial policies Participant in Peace Moberly Tract ADR and SRMP processes Recognizes concerns of First Nations and the need to provide mitigating solutions

29 Very large gas resource confirmed HHG applying CBG principles to new area Canada Energy Partners and GeoMet have both played important roles in Project history Gas and water production just beginning Effective stakeholder, community and First Nations engagement is critical

30 Peace River Project has the first commercial CBG production in BC The community of Hudsons Hope has been a large part of our success The tax credits and incentives the Province has provided to industry are critical its continued growth Its colder up there than we thought. Thank You


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