Petromin operator drills three CBM wells at Liuhuanggou

2010-01-18 08:29 ET - News Release

Mr. A. Ross Gorrell reports

TERRAWEST ENERGY SUCCESSFULLY COMPLETES 2009 DRILLING, SAMPLING AND TESTING PROGRAMS AT THE LIUHUANGGOU PROJECT IN CHINA

Petromin Resources Ltd. has released an update. Further to the project update provided in Stockwatch news on Nov. 16, 2009, TerraWest Energy Corp. has successfully completed the 2009 drilling, sampling and testing programs at the Liuhuanggou project in Xinjiang, China.

TerraWest Energy completed three coalbed methane test wells with total meterage of 2,316 metres (7,642 feet) on the Liuhuanggou project acreage in December, 2009. As previously reported, two of the wells were planned to core complete sections of the Jurassic Badaowan (J1B) formation in order to provide samples of all the prospective coals seams and surrounding prospective geologic sequences in the J1B.

The third well was planned to drill and core the Jurassic Xishanyao (J2X) formation for further testing of the very thick target coal seam.

All wells were completed as planned, on time and on budget. Multiple samples were taken for further analysis and the wells were geophysically logged. Further details of the drilling program results will be provided in due course.

The gas flow test at well LHG 08-01 was completed as planned. The pilot test was operated for over 30 continuous days and produced water and gas from a 30-metre (99-foot) section of the J2X coal seam at a depth of 750 to 780 metres (2,475 to 2,575 feet). As previously reported, well LHG 08-01 had been cased and cemented to the top of the target coal seam in 2008 and in the current test water and gas were pumped from the open drill hole without any stimulation or fracturing of the coal seam. Produced gas was flared.

Project management of the drilling was provided by Norwest Corp. under the direction of Dr. Yulin Li, senior resource scientist. TerraWest Energy used local drilling contractors, mud loggers and geophysical contractors for the drilling assignment. The follow-up laboratory work will be provided by laboratories in Xinjiang, Calgary, and Salt Lake City, Utah.

The pilot gas flow test was managed by TerraWest Energy's production engineer from Calgary and assisted by local production engineers. An experienced Xinjiang oil field contractor provided a variety of support services and equipment. Norwest provided specialized CBM engineering consulting to the pilot operations.

All 2009 operations were completed injury free.

TerraWest Energy, as required under the Liuhuanggou CBM production sharing contract, has now completed its initial phase exploration period obligation of drilling nine exploration wells and has exceeded the minimum exploration period spending obligations to date. The next phase of exploration is drilling and operating pilot testing wells. TerraWest Energy has already initiated pilot work by conducting the gas flow test and initiating engineering designs for pilot well completions in target formations.

A portfolio of photos from the 2009 campaign are available on the company's website under the features section.

TerraWest Energy is the operator of and holds a 47-per-cent interest with China United Coalbed Methane Corp. Ltd. holding 53 per cent in the PSC. The PSC is located in the southern Junggar basin of Xinjiang and is administered by PetroChina Coalbed Methane Company Ltd. Under the terms of the PSC, TerraWest Energy has the right to explore for, develop, produce and sell CBM which is defined as all gas, mainly consisting of methane, stored in certain named geologic formations of Jurassic age to a depth of 1,500 metres (approximately 5,000 feet) within the 653-square-kilometre (255-square-mile) area under the PSC.