Dart Energy Limited has entered into a coal bed methane (CBM) joint venture with NV Mijnen (NVM) in Belgium.
NVM is a wholly owned subsidiary of Limburgse Reconversie Maatschappij (LRM), a Flanders Authority owned enterprise, with a charter focused on promoting economic development and overall employment in the province of Limburg, Belgium. NVM owns approximately 80% of all coalfield concessions in the Flanders region of Belgium.
The joint venture will seek to explore, appraise and develop CBM resources on NVM's existing coal mining concession area in the Campine Basin, Flanders, Belgium. The joint venture will also seek to secure further CBM and unconventional gas concessions in the same region.
The joint venture will operate under the name NV Limburg Gas, and will be owned 80% by Dart Energy and 20% by NVM. Dart Energy will be operator and manager of the joint venture.
Initially, the joint venture will focus on, and have the exclusive rights to explore for CBM in a 350km2 area of the Campine Basin over which NVM currently holds a coal mining concession. Dart and NVM will fund the cost of exploration and share the economic benefits in proportion to their respective equity interests in the joint venture.
Dart and NVM have agreed an initial appraisal program of a minimum of 1 core well to be drilled during 2012. Depending on successful outcomes, the program might be expanded to include additional core wells in 2012, and pilot wells in 2013.
In addition, Dart and NVM have agreed to exclusively work together under an Area of Mutual Interest Agreement (AMI). The AMI is for 3 years and covers the joint pursuit of further licensing opportunities in the Campine Basin. The Campine Basin is currently generally unlicensed for CBM / gas exploitation, although a Belgian government decree opening the region for licensing is expected in mid-2011. In order to secure licenses in this region once available, a license applicant will be required to have both technical capabilities and some level of local Flemish ownership. Dart and NVM therefore believe the combined attributes of both parties via the joint venture being created will maximize the prospect of securing further licenses. Under the AMI, the joint venture will initially be targeting open acreage areas of approximately 700km2.
Announcing the Joint Venture, Dart Chief Executive Officer and Managing Director, Simon Potter said:
"Dart acquired Composite Energy Limited to provide a low cost CBM platform in Europe with a maturing funnel of business opportunities, including the opportunity in Belgium which Composite has been working on securing for over 12 months. The initial entry cost into the joint venture is modest, but over time the potential exists to work through this joint venture and develop a material CBM resource in the Campine Basin which although prospective is currently unexplored. This transaction is therefore consistent with Dart's stated strategy of gaining low-cost access to high-graded opportunities proximate to high demand gas markets and high prices, and furthers our desire to selectively expand our acreage across Europe."
"The transaction also marks the beginning of a relationship with NVM and its parent company, LRM, as our Belgian partner. We are delighted that Composite / Dart has been selected as NVM's partner of choice, and we look forward to working closely with our new Belgian partner as we seek to better understand and then unlock the CBM resource potential in the Flanders region."
LRM is a Flemish Authority-owned profit-oriented investment company which acts as an investor to promote economic development and general employment in the province of Limburg, Belgium. Whilst LRM is a generalist investor, core areas of focus for LRM include ICT, Life Sciences and Cleantech & Energy. LRM focuses on all sectors and enterprises, and owns approximately 80% of all existing coalfield concessions in Flanders, Belgium via its 100% subsidiary NV Mijnen.
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