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Exoma Energy To Appraise Prospective Locations In 2013

Exoma Energy (ASX: EXE) has flagged that its 2013 joint venture drilling with CNOOC in Queensland will likely be based around appraisal of localised sweet spots and possibly studies to review the geological system of the coal measures.

The company added the current 2012 exploration program in the Galilee Basin has been reduced from between 18 to 22 wells to between 12 to 14 wells.

This was due to the delays and interruptions caused by unseasonably late summer rain and early winter storms that affected the early part of the program.

In addition, the joint venture has decided to release the EDA Rig 2 following completion of Wardoo-1 to allow the joint venture to consider the results of its coal seam gas drilling.

Exoma said that as previously reported, the coal seam gas results to date have been below expectations.

The longerÔÇÉterm coal seam gas exploration program will now be determined based on an analysis of the results of all such wells drilled by the end of 2012.

Analysis

While the results of the coal seam gas drilling may not have been as outstanding as Exoma may have hoped, it is worth noting that the joint venture has also cored the Toolebuc Shale in most of the coal seam gas wells it has drilled.

Importantly, CNOOC's decision to expand its farm-in agreement with Exoma and make a strategic investment in the company points to the likelihood that the Chinese major may have its eye on the shale potential of the Galilee Basin permits.

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