MPO 0.00% 14.0¢ molopo energy limited

molopo waiting for update on gas lick , potential

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    molopo waiting for update on gas lick
    GAS explorer Molopo believes it can begin production of coalbed methane gas from its lucrative Moura holdings by the year's end.

    The Melbourne-based company has a 25 per cent share of three leases in Queensland's Bowen Basin in conjunction with major players Oil Company of Australia and Canadian outfit Helm Hydrocarbons.

    Successful testing has been carried out on two of 11 wells drilled in the Mungi field with gas production scheduled to start by December.

    Production and supply will be a boon for Molopo, which has struggled since it was bought in September 1999 by a team led by Peter Mitchell and his son Stephen, now managing director.

    The team believes the Mungi field has the potential to earn up to a $1 billion when supply is under way. Molopo also has interests in the neighbouring Harcourt and Timmy fields, where testing has started.

    A stumbling block, however, could be that Molopo is yet to secure a buyer for its gas but Stephen Mitchell remains confident one will be found soon.

    The company, he said, is negotiating with several parties, including OCA's majority shareholder Origin Energy.

    Molopo's product could prove attractive, given its closeness to the Roma-to-Gladstone pipeline.

    The company's spending on the project, $2.4 million, has been by its farm-in partner Helm.

    "The gas takes two to three months to come to the top of the well and produce so we would expect commercial production to start by the end of December or early January," Mr Mitchell said.

    "There is no contract in place for the gas at the moment but it's just a matter of finding the right price. It's not a real issue for us."

    Mr Mitchell played down Molopo's upcoming result in which a loss is likely. For the first time last year, Molopo made a profit of $979,060 after the abnormal payment from Helm. This year will not be as bright.

    "I think our result will reflect that we are a junior exploration company," Mr Mitchell said.

    Molopo shares closed yesterday at 4¢, up 0.4¢.

    and from OCA petroleum
    CBM focus drops OCA bottom line

    Thursday, August 07, 2003
    Despite an active year in the headlines the Oil Company of Australia (OCA) hasn't performed as well on the financial sheets with net profits for the financial year dropping by 15.4% to $25 million, down from last year's $29.6 million.

    Lower oil production has taken the blame for the result along with a commitment to expanding the company's CBM production. Currently CBM supplies 25% of Queensland's total gas demand and OCA participates in three of the five wells contributing to that supply.

    OCA's surplus funds have since been applied to developing its CBM resources resulting in reduced investment earnings compared to the previous year.

    Investment to date in CBM amounts to $225 million with total development costs expected to reach several hundred million dollars over future years. Around $100 million will be spent in the 2003/04 year, it said.

    At a cost of $48 million, the company increased its interests in the Fairview project area to 23.9% and in the Durham project area to between 89.4% and 99.5%.

    The results of appraisal drilling on the Durham field during 2002/2003 will be analysed in September 2003 and are also expected to substantially increase the CBM reserves.

    The development of these fields was given a major boost in December 2002 when OCA and Origin Energy signed an agreement with AGL to supply 340 PJ of gas from CBM fields in Queensland over 15 years from May 2005.

    Other producing CBM fields have maintained strong performances with the Dawson Valley (Moura) fields reaching record production levels during the year.

    The Myall Creek drilling program was suspended following a rig fire in April this year and is due to recommence in August. A reappraisal of the Myall Creek area of the Surat Basin resulted in a further five wells drilled, four of which successfully tested gas at commercial rates adding 48 PJ to OCA's reserves.

    Origin Energy has also declared its intention to make an off-market bid for all of the shares in OCA that it does not already own. Currently Santos has released a portion of its interest to the bid but is waiting on an independent auditors report before committing the remainder of its 11.8 million shares, roughly 10% of the issued stock.

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