Part Two: Will Chinas Coalbed Methane Projects Make a New Energy Billionaire?
Green Dragon’s CBM Concessions While Green Dragon Gas is blessed with early production-sharing contracts it negotiated through Greka Energy, and those offer the hope of several trillion cubic feet of coalbed methane gas, there could be serious obstacles in extracting the methane gas. In a May 2006 research report, the underwriters warned GDG “faces a combination of undersaturation, low permeability and low coal seam thickness that makes much of this resource challenging to commercialise.” Any versed CBM investor would look the other way after reading this string of hurdles GDG must overcome to commercially produce the methane gas. Despite this bleak assessment, Smith & Williamson endorsed and backed Green Dragon Gas. Research analyst James Elston wrote, “However, innovation by Green Dragon and its world class Chinese contractors should allow significant upgrades in recoverable reserves through time especially with rising gas prices.” That’s the blue sky aspect of Green Dragon – making
