TWE completed three coalbed methane test wells with total meterage of 2,316 metres on the Liuhuanggou project acreage in December 2009. Two of the wells were planned to core complete sections of the Jurassic Badaowan (J1B) formation in order to provide samples of all the prospective coals seams and surrounding prospective geologic sequences in the J1B.

The third well was planned to drill and core the Jurassic Xishanyao (J2X) formation for further testing of the thick target coal seam. All wells were completed on time. Multiple samples were taken for further analysis and the wells were geophysically logged.

The gas flow test at well LHG 08-01 was completed as planned. The pilot test was operated for over 30 continuous days and produced water and gas from a 30-metre section of the J2X coal seam at a depth of 750-780 metres. Well LHG 08-01 had been cased and cemented to the top of the target coal seam in 2008 and in the current test water and gas were pumped from the open drill hole without any stimulation or fracturing of the coal seam.

Project management of the drilling was provided by Norwest Corporation. TWE utilized local drilling contractors, mud loggers and geophysical contractors for the drilling assignment. The follow-up laboratory work will be provided by laboratories in Xinjiang, China, Calgary, Canada and Salt Lake City, US.

The pilot gas flow test was managed by TWE’s production engineer from Calgary, Canada and assisted by local production engineers. An Xinjiang oilfield contractor provided support services and equipment. Norwest Corporation provided specialized CBM engineering consulting to the pilot operations.