Scotland

The PEDL 133, 161 and 163 group of licences sits in the northeast part of the Scottish Midland Valley - a sedimentary basin comprising mainly Carboniferous and older rocks at outcrop. Composite Energy's licences are within the Central Coalfield and its easterly extension into Fife.

PEDL 133 was an out-of-round award to Composite Energy in 2004; it was Composite's first hydrocarbon licence and is the location of the Airth CBM pilot. The primary CBM target coals are Namurian in age and are contained within a broad syncline known as the Kincardine Basin. Composite Energy has drilled and cored four exploration wells on the licence with net coals in the Namurian varying from 28 to 47ft and gas contents in the Airth CBM Pilot area of up to 492 standard cubic feet of gas per tonne of coal..

Throughout the licence, multiple seams exceed 3ft thickness at any location. Four seams are completed in the Airth Pilot using six horizontal, multilateral development wells. Gas rates have been extremely encouraging peaking at over 200mcf/day for an individual well during 2009. Produced water is treated and discharged under licence. Gas production from the field is currently suspended pending analysis of the production results and design work for full field development.

In addition to CBM, potential for gas shale has been identified within the PEDL 133 area - two zones are currently being mapped in a stacked shale gas play.

PEDLs 161 and 163 are located in the Fife Coalfield to the east of PEDL 133 and were acquired during the 13th Round of licensing in 2008. The coals in these areas are more heavily mined historically and are generally shallower than in the Kincardine Basin. Exploration drilling has confirmed the moderate net thickness in deeper parts of PEDL 163 with lower gas content and saturation on the western limb of the Leven Syncline than in PEDL 133. Our exploration well on PEDL 161 confirms the presence of significant uncharted volcanics within the Namurian coal-bearing sequence.

The further resource potential of these licences and their proximity to energy demand centres means that evaluation of development opportunities will continue