Poland

The concealed Lublin Coal Basin was first discovered in the mid 20th Century and is being explored for hard coal, conventional hydrocarbons and coal bed methane. The target coals are Carboniferous (Westphalian, Namurian and Visean) in age, and gas contents of up to 450scf/ton have been reported in the literature.

In the first quarter of 2010 Composite Energy successfully completed two cored exploration wells (Perespa 1 and Siennica 1), one in each of the Chelm and Werbkowice Concessions and a third stratigraphic test well (Leszczany 1) was drilled on the Chelm concession. These vertical wells ranged from 4,500' to 5,895' deep with an average of 3,275' of 3" diameter core recovered from each of the cored wells with overall core recoveries of between 96-99%. A number of coal samples from each well were placed in desorption canisters and gas contents measured in accordance with USBM standards.

Where the entire coal bearing sequence was cored, a net coal thickness of 25' to 32' was observed. In Perespa 1 (Werbkowice concession), gas contents show a strong trend increasing from near zero at the top of the coal bearing sequence to 485scf/ton (DAF) at a depth of 4,500'. Complete results for the Siennica 1 are not yet available but preliminary data show a similar trend.

A full evaluation of the drilling results is under way. Composite Energy has now fulfilled the obligations of Phase 2 of the concession granted by the Polish Authorities in 2008 and is evaluating the next steps.