Hephaestus Share Discussion Threads

[rapier686] 04/12/2006 11:29

See also Independent Resources listing prospectus who have a neighbouring block to HEP's Tuscan assets. They've been touting ECBM right from the off.

Incidentally I was talking to a CBM expert a couple of months ago and I brought the subject up. He told me that it's currently just a research idea, with all sorts of practical issues to sort out efficient solutions to. As an idea it's nice since Co2 adsorbs preferentially onto the coal, but not yet approaching the stage of actually doing it commercially.

[buffin] 04/12/2006 06:57

An interesting bonus?

Posted by Tapman at

I don't know if any of you EPG holders have heard of this, but it could be another big positive in EPG's favour (along with all other CBM companies).

I first heard about it a few weeks ago when NZ's largest coal producer - Solid Energy - said they were undertaking trial programmes in the South Island.

Since then I've read that a number of large global companies (such as BHP) have been looking closely and spending a lot of research money (millions) in relation to CBM production methods.

They call it Enhanced Coalbed Methane Recovery and Sequestration.

What is it ?

Where CBM is used for electricity generation, the carbon dioxide(CO2) produced by the combustion of the gas may be captured and sequestered into the same coal seams from which the CBM was extracted.
Theoretically , coal seams absorb more than twice as much CO2 (by volume) as the methane extracted from them, offering a unique way of reducing greenhouse gas emissions from electricity production.

In fact this exchange ratio could imply that, in areas rich in coal, energy plants could be developed that would have an emission of CO2 per energy unit that is much lower than that of conventional energy plants or even approaches zero.

Also,
The injection of CO2 into coal seams is being trialled, both as a means of enhancing the recovery of CBM and for permanent CO2 storage. Research suggests that CO2 injected into coal seam reservoirs can displace the methane imbedded in the coal and therefore enhance it's extraction, theoretically allowing recovery of all the methane in place

Also,
The economic outlook for CBM-related sequestration also seems positive. Research suggests that this technology has the scope to deliver sequestrationat a cost of less than US$8.00 a tonneof CO2.
This compares with an average price per tonne of CO2 of US$10.00 for carbon credits traded in Europe over the sixth months to May 2004.

The advantages of injecting CO2 into coalbeds are numerous.
It sequesters the CO2 (greenhouse gas).
It shortens the production time for CBM.
It improves the recovery volume of CBM.

Info taken from..
Netherlands Institute of Applied Geoscience.
Society of Petroleum Engineers.
BHP Billiton - Coal bed methane clean power potential.

Of course the European Commission is currently setting carbon dioxide emissions levels for 2008-2012 and is demanding cuts - in the present round most EU countries have given themselves targets above their present consumption levels!

Early days yet since the German are fuming (oops there goes more pollution) and the French aren't happy either.



If this does stick, I suppose the cost of credits will rise.

[rapier686] 01/12/2006 08:55

Taking these HotCopper EPG AGM observations

4. For the Folschviller well - they found 80% more coal than projected, and 17% higher gas content. As we know, they also found gas in the interburden rock.
Anthony alluded to the fact that this is all going to result in a very, very significant upgrade to the resource estimate for Lorraine.

Whilst the sign of the error is in the right direction I'm quite concerned at an error of this magnitude in the amount of coal. I understood they had a large amount of coal exploration hole results around this region - after all Folschvillier was an operating mine. The drill site is 200m from the mine's social club's football ground!

By contrast the Diebling area is pretty wildcat.


6. European listing - stated they are likely to list in France. I agree with 'Dexter, this is politically a very smart move, and French Parochialism SHOULD NOT BE UNDERESTIMATED.

So when in London he talks up London's record of supporting resource companies and Paris's dearth of the same on a smaller scale than Total. And when in Paris/Sydney he prefers a French listing. Well it certainly explains why the Heritage takeover is not simultaneous with an AIM listing.

[rapier686] 30/11/2006 22:47

Final Results


Not seeing a lot new here, but note
"EGL is investigating appropriate methodology to enable quantification of this resource as we are of a view that the Gas in Place in the sediments when measured will enable a considerable upgrading of the current resource."

"trial production is planned at both Folschviller and Diebling during 2007" but it is "Assuming drill rig availability and success of the Diebling core program"

"The Company has sufficient funds for its current commitments, however it will have to raise further finance for the production test drilling planned to commence mid-2007"

Though of course we no longer anticipate independence by mid-2007.

[buffin] 29/11/2006 07:16

Agree absolutely. Not to mention the possibility of Fidelity selling again down under....

But 15p seems bonkers.

[rapier686] 28/11/2006 22:43

No - I was prepared to go to 16p. It's not like the stock's been flying out the doors in a two way market. Still gives them a 7% turn - back in the 10-12p days all my bids around mid got accepted, at least in part.

At 17p the margin's getting a little slim to be worth bothering. I've around 3% costs to take into account: 0.5% stamp, and my foreign dealing's via TDW with 1% commission 1.5% exchange rate spread. There's price risk in that I can't transact the deals simultaneously. And there's always the risk the takeover won't proceed, or not on the advertised terms though I'm not adverse to holding HEP anyway.

[buffin] 28/11/2006 22:28

I suspect the latter ... I can't believe MMs would want to hoard an ofex stock with an outer dependent on a bid from an Australian company yet to be confirmed.

Obviously you don't consider 17p a "sensible" offer!

[rapier686] 28/11/2006 22:16

Well yes I do think EPG looks cheap, but I've still been planning to sell some as a bit of takeover arbitrage with, as you point out, a decent differential opening up.

Unfortunately I reckon the MMs must have the same idea as despite taking in a load of HEP stock at 15p, they do not seem willing to entertain sensible offers for it. Or perhaps Anglo are still soaking up anything anyone sells.

[buffin] 28/11/2006 09:17

... but someone sold 7,500 this morning at 15.2.

[buffin] 28/11/2006 07:14

Good morning.

A$0.8 to sell = 19.33p per HEP share?

[buffin] 27/11/2006 23:36

EPG's AGM presentation is at . (I'm hoping that works.)

From a quick initial look much will be familiar. It reminds us that Folschviller was better than expected.

Diebling is at 859m now with a total depth targeted of 1500m.

Page 30 of 31 sets out the 2007 program. As it says, priority is Lorraine. But it includes commencement of work program at Lons Le Saunier; commencement of work program in Tuscany; further reservoir modelling at Gardanne; "acquisition strategy continues"; European (sic) stock exchange listing.

Well that lot will hopefully provoke some questions!

At A$0.77 the presentation gives the market cap (166,646,364 shares) as A$128m + 1m unlisted options and says the HEP transaction represents 16% of EPG undiluted - 31.5m shares to be issued + £860,000.

It's early days, of course, but if they can deliver even a fraction of what seems possible, this feels very cheap.

Let's see what the feedback from the AGM is.

Meanwhile, at A$0.77 am I right that the value per HEP share is about 18.66p?

[lmhardy01] 27/11/2006 06:14

EPG closed at .77 up 4 cents 382 K traded looking good - drilling results soon + statement of reserves for the first time.
AGM tomorrow so maybe that is when they are going to release the numbers ?

[lord gnome] 24/11/2006 07:37

Hopefully this will give a bit of a boast to HEP. The share price has been drifting down with light selling and no buying.

[buffin] 24/11/2006 07:03

Good to see EPG rallying 9%, maybe in anticipation of the AGM. Strange there have been no drilling updates, but the trivial postings on HotCopper suggest there is no information out there.

[lmhardy01] 09/11/2006 22:48

I agree they are buying off market, They are also an investor in EPG
I think we will see a revaluation of EPG in around 4 - 5 weeks once they have completed the new wells. Basically they will publish their first 2P & 3P resource statement. This should put a firm initial value under the share price.

[haydock] 09/11/2006 20:01

No94 Buffin reproduced on APF bb.
Many thanks Buffin.
Re APF.
Nobody has any real idea why they are buying, they need the technology for Canada & a link would be usefull , but they also very shrewd investors in other comapnies,& coal is the great driver of the share, in Ausralia & Canada.
This will be joined up thinking, not a random hit I would think.

[haydock] 09/11/2006 20:01

No94 Buffin reproduced on APF bb.
Many thanks Buffin.
Re APF.
Nobody has any real idea why they are buying, they need the technology for Canada & a link would be usefull , but they also very shrewd investors in other comapnies,& coal is the great driver of the share, in Ausralia & Canada.
This will be joined up thinking, not a random hit I would think.

[lord gnome] 09/11/2006 19:49

From what I've seen, the numbers certainly don't add up, so they must have been buying elsewhere. Its not a counter bid - they are part of the EPG concert party.

[buffin] 09/11/2006 19:40

Are you sure?

No :). Admittedly it's just my impression that the numbers don't add up, especially when we would presumably be seeing buys as well.

Over on unquoted, esteban has posted that they are an investor, not a counterbidder.

[sranmal] 09/11/2006 17:43

They must be buying off market

Are you sure? There seems to be continual small selling since the announcement. Haven't added them up but they could be buying those.

[buffin] 09/11/2006 17:40

APF reported 1,975,000 (3.7%) on 16 October 2006.

And then 2,150,000 (4.0%) on 17 October 2006.

Now it's 2,750,000 (5.1%).

They must be buying off market... and they're still interested, good!

[taylor20] 02/11/2006 08:18

02/11/06 -

[lmhardy01] 01/11/2006 09:35

Egoi in regards to your comment re valuation multiple re EPG It is clear that now HEP shareholders are in Lockstep with EPG- ie if EPG rises then so will HEP. Yes I agree that the multiple was "fixed" at 80 Cents EPG (.55 Shares HEP to 1 EPG) artificially "not happy Jan" but that is life

[lmhardy01] 01/11/2006 09:29

yes the webcast is a little old however the fundementals remain the same, 2P & 3P resources will be published after the current drilling campaign is over - they can do this. 1P can only be published after pilot production starts.