Overview of the Vranino Gas Project
The Vranino project is situated in close proximity to a major gas pipeline in northeast Bulgaria. The area covered by the License Agreement (the “license area”) was previously extensively explored for the potential to mine coal in the deep coal beds found in the Dobrudja Basin. Based upon this prior coal exploration activity, we know these coal beds are a potentially prolific source of natural gas. The main component of natural gas is methane and the data compiled from the prior coal exploration activity indicates the coals in the Dobrudja Basin contain natural gas that consists of 90-95% methane. This methane is naturally occurring and will be produced through conventional drilling – the Company will not use coal gasification or hydraulic fracking, which is banned in Bulgaria.
The Company intends to initially drill up to five exploration wells, in a conventional and safe manner, consistent with best practices for environmental cleanliness and international standards. If successful, the project will be a source of natural gas for the local community, will provide a cost savings for consumers and will reduce the need for Bulgaria to purchase expensive imported natural gas.
Historical exploration efforts
Between the 1960’s and the late 1980’s, over 220 wells were drilled on the Vranino 1-11 Block and the immediate surrounding area, with one additional well drilled in 2005. Of these wells, 120 wells are located on the Vranino 1-11 Block and intersect targeted gas bearing coal seams at depths of between 1200 meters and 2500 meters.
The previous drilling centered on massive gas-charged coal deposits where over 60 individual coal seams (with varying thickness and gas content) have been identified. The coals are inter-bedded with various sandstones, which may also act as a reservoir for gas escaping from the gas bearing coals. The data gathered from the well drilled in 2005 confirmed numerous gas bearing zones of interest.
The Company has access to a massive amount of geological data in the Vranino 1-11 Block and the surrounding area, including logs, gas isotherms, location tops, temperature, DST and some core data, as a result of the prior drilling of such a large number of wells. Our evaluation of such data, which began in mid-2013, confirms that the Vranino 1-11 Block contains significant gas-bearing formations.
While some of the wells have been converted to water wells, a large number of the existing wells are available for re-entry and possible deepening. One of the early objectives for Park Place will be to determine whether these wells can be successfully re-entered and deepened. If some of the old wells can be successfully used for future exploration, the Company could realize significant costs savings and higher returns.
The coal beds in the Dobrudja Basin contain over 60 individual coal seams, many of which contain significant amounts of natural gas. Prior exploration activities targeted the coal seams for potential mining of the coal; however, the seams in the Dobrudja Basin were determined to be too deep for commercially viable coal mining.
Exploration and development strategy – a modern “green” approach
Park Place will use modern techniques for gas extraction that are environmentally friendly. (many of which have been developed in past 10 years). These techniques will not involve hydraulic fracking or underground coal gasification.
Our plan is to initially drill 2 conventional vertical wells and core and test them; we will also re-enter and test an existing well. Once we evaluate the results, we will design and test completion techniques which will be safe and environmentally sound, and which we hope will optimize the production of natural gas from the coal seams. But we repeat: we will not use hydraulic fracking, which was banned in Bulgaria in 2012, or underground coal gasification.
In the USA, more than 50,000 wells have been drilled into coal seams in over a dozen basins. In Canada, over 10,000 wells have been drilled into coal seams. In the EU, there are currently underway projects targeting coal seams in the UK and pending in France.