Deep Industries Awarded 2 CBM blocks for exploration of Gas

Deep Industries Ltd has announced that the Company has been successful in winning two highly prospective exploration blocks in India's CBM III licensing round.

The Company led consortia had bid for two of the ten blocks offered in the license round and was successful in winning both of these blocks.

The Government of India has sent Letter of Award to the Company led consortia for blocks in Singrauli (Madhya Pradesh) & Godavari Valley (North)(Andhra Pradesh).

The details of these two blocks are given herein below:

- Block
Singrauli
- State
Madhya Pradesh
- Area (Sq. Km.)
330
- DGH Resource Estimate (Billion Cubic Metre)
31

- Block
Godavari Valley (North)
- State
Andhra Pradesh
- Area (Sq. Km.)
386
- DGH Resource Estimate (Billion Cubic Metre)
29.65

These two blocks are in partnership with Coal Gas Mart, USA. Following is the sharing. pattern of these blocks:

1. CBM Blocks
Singrauli, Madhya Pradesh
- Deep Industries Ltd
90%
- Coal Gas Mart, USA
10%

2. CBM Blocks
Godavari Valley (North), Andhra Pradesh
- Deep Industries Ltd
40%
- Coal Gas Mart, USA
10%

Based on the Company’s own technical work in conjunction with the Directorate General of Hydrocarbon (DGH) estimates, the Company believes these blocks hold significant Coal Seam Gas reserves potential.
About Singrauli Main Basin CBM Block Madhya Pradesh:

Singrauli Coalfield is a major repository of coal in the heartland of the country. It is a composite basin composed of Moher sub-basin in the east and main sub-basin on the west which are separated by a concealed basement high. The Moher sub-basin is well known for prolific coal development where extensive mining operation is in progress. The main sub-basin has very large spread where the Barakar coal seams of Lower Gondwana sequence (Permian) are concealed below a variable cover of younger sediments. The deeply buried coal seams of the main basin offers good prospect for CBM exploration.

The Barakar coal measure in the main sub-basin where the CBM block has been carved out contains eight coal seams. The Barakar seams are of high volatile bituminous B/C rank, with an average gas content of 4 m3/t with localized supply of heat from igneous intrusions, all in combination are likely to contribute to CBM gas generation and storage in seams.

CBM Block at Singrauli covers an area of 330 sq. km. and the block is estimated to contain 31 Billion Cubic Meters (BCM) (1.1 TCF) (Trillion Cubic Feet).

About Godavari Valley (North) Coal Field, Andhra Pradesh:

The Barakar Formation (Lr. Permian) of the Lower Gondwana sequence is the main coal bearing unit. Presence of one coal seam has been recorded from Raniganj Formation (Ur. Permian) also. The coal bearing Barakar Formation is exposed along the northwestern margin of the basin where extensive mining operation is in progress from Dorli Belampalli belt in the north through Somagudem-Indaram in the centre to Ramagundam belt further south. The dip side of these mining belts is considered to be the most potential target area for CBM exploitation. In these areas, as many as 10 coal seams of 0.6 to 18.2 in thickness have been established in Barakar Formation through 4 to 5 seams are more persistent. The coal seams are by and large high volatile bituminous 'B' in rank with vitrinite reflectance of 0.6-0.7% within 600 m depth limit. There are evidences of enhancement of rank of coal with greater depth of burial.

Adsorption isotherm of Barakar coal seams and limited desorption data show that the coals are likely to store4-5m3/t of gas, which may increase at greater depth of burial with better permeability due to intensive high fracture density in rift setting.

CBM Block at Godavari Valley covers an area of 386 sq. km. and the block is estimated to contain 29.65 BCM (1.05 TCF).

Future Prospects India in Gas Sector:

India is set to emerge as fourth biggest user of energy globally by 2010 and gas demand is projected to increase substantially.

India has significant coal seam gas potential with 765 MTOE (million tons of oil equivalent) of proven coal reserves - representing around 7% of the global figure.

All of the above factors make it an ideal country for exploration and development of Coal Seam Gas.

Source : Equity Bulls

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