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MPO 14.0¢

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  1. pillman

    2,076 Posts.

    Molopo delivers first methane gas
    By Scott Murdoch

    JUNIOR gas explorer Molopo has delivered its first load of coal seam methane to Origin Energy as production increases at the Mungi field.

    Origin, a major shareholder in the Molopo joint venture in the Bowen Basin through Oil Company of Australia, has bought the project's capacity 2.2 terajoules a day.

    The first supplies were transferred on the weekend after a delay in the installation of a gas compressor on the Mungi site which cost Molopo $2.5 million.

    Molopo managing director Stephen Mitchell said the income from the deal, added to a recent $4 million institutional share placement, would fund further exploration in the contract area.

    "Coal bed methane requires a lot of patience. We said we expected to be producing by early March so we have come in near that time," Mr Mitchell said.

    "We have been testing for 2.5 years now, that's how long it takes to identify a resource and turn it into a reserve."

    Mr Mitchell said the Mungi field currently had 11 wells which were spaced apart enough to allow further successful development.

    Molopo also recently spudded one of two wells in its Gloucester Basin project in NSW.It expects results back later this week.

    The stock closed up 0.1 yesterday at 6.5.

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