Carbon Minerals to reactivate on the Liverpool Plains – A stab in the heart

Carbon Minerals has recently informed shareholders and the ASX that they intend to pursue a works program in 2020 that includes bringing in a workover rig to attend to four coal seam gas wells within PEL 1 & PEL 12 and the installation of relevant infrastructure to enable production testing for up to six months and 2D seismic work. The company has flagged for this work to occur throughout 2020 with the onground activity to commence in Quarter 3, 2020.

Santos have a strong 65% interest in the Petroleum Exploration Licences and this recent communication from Carbon Minerals suggests that Santos are still very much interested in the Liverpool Plains despite saying otherwise publicly:

“We have no plans to drill wells in the Liverpool Plains – The Narrabri Gas Project is contained. Our plans are simply not to drill in the Liverpool Plains.”

Mr Kevin Gallagher (Santos CEO)

Carbon Minerals has stated that it expects that NSW PEL titles it holds will be renewed by the end of Quarter 2, 2020. We have a clear case here of two public companies involved in the same venture contradicting each other. At least one of them is not disclosing honestly to its shareholders.

Carbon Minerals is owned by former NSW Planning Assessment Commission member Marcus Lincoln-Smith who has repeated the industry mantra over the years that “Farming and coal seam gas can co-exist” despite evidence from the 12 year Queensland experience that where this occurs, they only co-exist with extreme detriment to agriculture.

Carbon Minerals listed on the ASX in 1980 and has has been involved in a range of energy, base and precious metals exploration throughout Australia, but since 1990 has concentrated on coal seam gas exploration – mainly in NSW, and mainly in the Gunnedah Basin via its wholly-owned subsidiary, Australian Coalbed Methane Pty Limited (ACM).

The Lincoln-Smith Family are linked to the oil and gas industry through Paul (Marcus’s deceased father) who was a friend of Frank Nugan of Nugan Hand Bank infamy. Marcus has a strong science background in the area of marine biology, he formed the company The Ecology Lab, which industry giant Cardno acquired in 2008. He remains a specialist consultant and Senior Principal in the Water and Environment team for Cardno and was involved with the botched dredging of the Gladstone Harbour for LNG boats.

Map of the Carbon Minerals/Santos Joint Venture focusing on the Biogenic Fairway (red hatched area) near Gunnedah. The map shows both the Glasserton sites and the Kahlua multi-well pilot which are the likely targets of the upcoming Works Program
Map of PEL 1

A Biogenic Fairway contains gas produced by microbial action within relatively shallow seams. One is known to exist in the area to the south-west of Gunnedah (see map below). The Biogenic fairway was discovered in 2004 and seems to be the only target of any real value across PELs 1 and 12 with many of the exploration wells showing low CH4 and high CO2, a problem that detracts from the economic viability of the Narrabri Gas Project as well.

“Much of the coal in the Gunnedah Basin is not at optimum maturity and furthermore during geological history some of the original thermogenic gas has escaped.”

Carbon Minerals
Map of PEL 12

The source of the methane B(biogenic) is the primary target for Carbon Minerals/Santos, but the issue across the PELs of the CO2 found away from the biogenic fairway can not be discounted. Tabled below is some of the publicly available data.

Name of well               PEL         CO2 content

Bando-1PEL 1230% CO2 in Maules Creek Formation
Bomera East-1PEL 1280% CO2
Kerawah-1PEL 1290% CO2
Tambar Springs East-2PEL 1250% CO2
West Quirindi-1PEL-117% average CO2
Georges Island-1PEL-115% CO2
KahluaPEL-14% CO2 in produced gas
Slacksmith-1PEL-1CO2 95+% in Maules Creek formation

A 2012 map of PELs 1 and 12 (above) includes the Queensland Hunter Gas Pipeline which has recently been resurrected and has been approved as Critical State Significant Infrastructure. The pipeline skirts the eastern edge of PEL 1 (gray dashed line). Landowners have been left in the dark regarding this pipeline as there has been almost no correspondence between landholders and the company behind the project, Queensland Hunter Pipeline, during the extended timeframe, led farmers to believe the project had lapsed.

Carbon Minerals was contacted for more details and a timeframe for their works program. The enquiry was then forwarded to Santos who responded quickly. The response is at odds with what Carbon Minerals tell their shareholders and investors in their Works Program.

The Glasserton / Georges Island site was the site of a coal seam gas blockade in 2011. These wells are likely the ones referred to in the Works Program

Santos indicates that they have no further updates on the proposed PELs 1 and 12 works program and it could be some months before they do.

In late March 2020 Carbon Minerals published on their website a Notice indicating an unsecured loan facility agreement with Palmarc Investments Pty Limited for the purposes of working capital and  will host it’s AGM in Sydney on the 27th May 2020.

The companies seem to be giving mixed messages in regards to the upcoming works program and unfortunately, Carbon Minerals appears to be a passive partner to Santos – hostage to the same community opposition and with the same variable CO2 and NOx gas throughout PEL 1 and PEL 12 which make the whole premise for developing this energy source unfeasible.

This Post Has 4 Comments

  1. Elizabeth O'Hara Reply

    It is such a scary time with Kevin Powers, National Covid-19 Co-ordination Commissioner, and former chief executive of the Fortescue Metals Group, claiming on Q&A on Monday 20 April that projects such as the Narrabri Gas Project are “an opportunity to get low cost gas into our markets and make sure that we can generate low cost electricity”- the last gasp of these fossil-fuel managers of our governments must be stopped from destroying water, air quality and land. Fossil fuels simply must go.
    Thank you North West Protection Advocacy- your determined, indefatigable and thoroughly-research work is vital to the future of our region.

  2. Nicky Chirlian Reply

    So – we are left in a suspenseful holding pattern? I am hoping that the last sentence is accurate! Thankyou for this information.

  3. Melanie Reply

    Can’t eat money. Can’t drink gas. Leave our land and water alone!

  4. Tony Pickard Reply

    Sulphate reducing Bacteria, if it gets into the area were the methanageones are will stop the biogenic process as well as render the methane useless by contaminating with Hydrogen Sulphide gas. Cost to separate the two very high, with Hydrogen Sulphide having a very bad effect on the environment ad human health.
    EPA is supposed to be very down on Hydrogen Sulphide emitters.
    Little wonder that no none wants to acknowledge there existence and when found, via the Hydrogen Sulphate smell, go all out to kill them with biocides.

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