cbm cmm prospects

Apologies if this has already appeared, some snippets from McClure.


Coal bed methane producer EGL eyes Benelux after French buy

London (Platts)--5May2008
After buying up much of France's potential coal mine methane sites,
Australian company European Gas Ltd, now plans to expand over the border to
secure exploration rights in the Benelux countries. In an interview with
Platts, EGL's director Anthony McClure said the Wallonia region of Belgium is
the company's next target.

EGL is looking to take advantage of gas price rises in recent years by
tapping the potential for methane gas found in Western Europe's coal basins,
both in disused mines and other coal bed areas, McClure said.

In early April, EGL signed an agreement with Belgium's Transcor to form a
joint-venture called Benelux JV, which aims to explore, produce and market
hydrocarbons, including CBM and CMM, in Belgium, the Netherlands and
Luxembourg.

Transcor is an international supplier of energy products and a subsidiary
of CNP, the company owned by Belgian billionaire Albert Frere that owns 9.4%
of utility group Suez and 5% of Total.

Transcor funded EGL's December 2007 buyout of Gazonor, a subsidiary of
state-owned coal mining company Charbonnages de France, which holds three CMM
production assets in the northern Nord-Pas de Calais region. Transcor used
convertible notes to fund the buy which, if converted, would give Transcor an
18% stake in EGL.

Between 2003 and 2007, some 40 million cubic metres per year of methane
was produced from Gazonor's three French sites and proven reserves amount to
around 865 million cu m.

EGL estimates the cost of gas production at Eur13/MWh, which compares
with a forward price at Belgium's Zeebrugge hub of around Eur32/MWh for the
2008 gas year.

The company is looking to expand production at the sites, where, it says,
there is much CBM potential, and is exploring in the Lorraine region in
eastern France, the southern region of Gardanne, and Saint Etienne and Lons Le
Saunier in the center of the country.

IN TALKS WITH BELGIAN AUHTORITIES

The Transcor-backed Benelux JV venture is now in discussions with Belgian
authorities over certain sites in the French-speaking Wallonia region, McClure
said.

"We are looking at mimicking what we're doing in France and there is
pretty substantial potential, not just in coal mine methane but also in coal
bed methane," he said.

"In France we have secured the bulk of the acreage that is amenable to
coal bed methane and coal mine methane... it's going to be big business in
Europe in the coming years...there is no reason why it shouldn't be," he
added. EGL has carried out regional geological surveys in Walonia, McClure
said.

"Over the coming months we hope to have a lot more clarity on where we
are going to commence our operations," he said.

The company sees potential for coal mine methane in the region, but
longer-term, coal bed methane shows better prospects, McClure said, and the
company also has Luxembourg and the Netherlands in its sights: