The only significant hurdle is the final execution of the Joint Venture Operating Agreement with BHP Billiton in relation to the project.
Under the terms of the facility, RMB will be issued with 3,407,887 December 2010 options over ordinary shares in CH4 at a strike price of $0.9913.
"RMB Resources is a strong finance partner with an excellent understanding of the resources sector, and we look forward to a long relationship with them. The RMB facility will provide us with the flexibility to finance future growth and expansion opportunities as they arise," said CH4 chief executive Louis Rozman.
"This is not only good news for CH4, but for the entire coal seam gas sector as it demonstrates the growing acceptance of coal seam gas production as a bankable business."
CH4 holds a number of exploration and production leases in Queensland covering approximately 7,000sq.km, centred around the Northern Bowen Basin coalfields. The company's first significant development and construction project, the Moranbah Gas Project, a 50:50 joint venture with BHP Billiton, holds a 15 year contract to supply up to 290 PJ of gas to Enertrade, a Queensland Government power corporation.
The project is now on track for delivery of commissioning gas in August this year and first contract sales in February 2005 with over 70% of construction now complete.
Fifteen wells (each comprising a vertical well and two lateral wells) have also been drilled and are pumping water with eight wells producing gas.
CH4's total proved and probable (2P) reserves have also increased from 106PJ to 193PJ, an 82% increase, while its proved, probable, possible (3P) reserves have increased from 537PJ to 807PJ. The additional reserves are located directly to the south east of the Moranbah Gas Project within PLA 196 and in the Peak Downs area south of PLA196.
Enertrade is constructing a 391km pipeline to transport gas from the Moranbah Gas Project to Townsville, where it will be used for electricity generation at Transfield's 220MW Townsville Power Station and by other industrial customers.
EnergyReview.net, July 28.
