1. Riverside Energy Ltd
presenter
Dr John Bishop
executive chairman
16th August, 2012
Disclaimer
No representationor warranty is made as to the accuracy, completeness or reliability of the information contained herein.
Any forward-lookinginformation in this presentation has been prepared on the basis of a number of assumptions which may
prove to be incorrect. This presentationshould not be relied upon as a recommendation or forecast by Riverside Energy Ltd.
2. Summary
• Has large resources of coal in the UK suitable for both
conventional mining and exploitation by underground coal
gasification (UCG)
• Provides exposure to worldwide demand for thermal and
coking coals
• Is well placed to help fill the UK’s ‘Gas Gap’ (now >50%) and
increasing demand for energy security
Riverside Energy:
• To take significant equity interest through early seed funding
The Opportunity:
3. Why?
• An exciting time for energy: growth and change
• The ‘final’ solution for sustainable power will be: nuclear fusion?,
geothermal?, ?
• Hydrocarbons will ‘always’ be needed for chemical feedstocks, if
not for liquid fuels
• Gas will be a decades-long source of energy (largest growth)
• What are the requirements for a successful source of energy?
• What energy sources fit those
criteria?
World energy
consumption
per capita
(kg of oil equiv.)
• UCG
4. Oil
Gas
Coal
Global Fossil Fuel Resources (IEA)
(pre-shale gas)
Why UCG?
• Coal is the world’s most plentiful source of energy
• Making gas from coal is long-established (‘town gas’)
• UCG gas (‘syngas’) is all in-situ and reduces carbon output by
50% to 100%. UCG has ‘come of age’ with directional drilling
• Syngas is a versatile gas and can be used for:
• Electricity generation
• Transport fuels
• Fertilisers
• Hydrogen (cheapest production)
• Other chemical feedstocks
5. Why Europe?
• Europe has a strong desire for energy security and energy self-
sufficiency
• Europe has high energy costs and a stable, favourable regulatory
regime with a 'coal culture’
• Numerous offtake opportunities in close proximity to production
• The UK has near-zero acquisition costs and minimal royalties,
plus a common language and history
• UCG has a long history in the UK
6. Why Riverside?
• The Projects: very large resources including the Firth of Forth:
“One of the best UCG sites in Europe”
• The People: engineers and scientists experienced in UCG
• The Directors: experienced in creating and running resource
companies
• A ‘Plan B’: excellent resources of thermal and coking coals
suitable for conventional mining
7. UCG Explained
• The same process used to make ‘town gas’ (at the Gas Works) is carried out
within the coal seam. Simplified:
• Two boreholes are drilled into the coal seam using directional drilling
technology: one injection hole and one production hole
• A small portion of the coal is burned to provide the heat for the chemical
reaction
• Air / oxygen / steam down the injection hole
• Syngas up the production hole
Typical syngas composition: H2 30%,
CH4 15%, CO 15%, CO2 40%
Linc Energy
C + H2O = H2 + CO (syngas)
8. UCG Process
Gas to liquids
plant
Syngas clean up,
CO2 separation &
sequestration
Hydrogen-fired
power station:
zero emissions
9. UCG is a safe process
• Stay away from aquifers, go deep and beneath sealing strata.
• Maintain a ‘negative’ pressure in the gasification chamber. The gas
is then contained and flows up the production well.
• Subsidence minimised or eliminated by good operational design.
Environmentally Safe
10. UCG CSG
Energy Source Coal Gas in Coal
Gas Produced Syngas Methane
Energy Extracted 50-100% <5%
De-watering required No Yes
Fraccing No Often
Subsidence Possibly No
Borehole Collar Density Low High
UCG v’s CSG*
* Coal Seam Gas, also referred to as Coal Bed Methane (CBM)
12. Global UCG Projects
Gasifying
Angren: 50 yrs
cont. operation
ENN: 2.5 yrs
5MW operation
Majuba project
operating for 4 yrs
LNC & CNX
pilot plants
NZ Gov’t
project u/way
Linc Energy:
Wyoming,
China, UK
Carbon Energy:
Chile, Turkey, USA
Riverside:
UK
Announced
or planned
Swan Hills:
UCG @ 1400m
Previous
EU Pilot
13. • Riverside Energy Ltd: A pre-IPO Australian Underground Coal
Gasification Company with UK subsidiaries holding the licences
(REL: 100%)
• Seed capital raised to date: $2M
• Issued capital: 59.2M shares / 53 shareholders
• Experienced, technical Board of Directors:
o Dr John Bishop, Executive Chairman
o Doug Goodall, Non-Executive Director
o Dr Roger Lewis, Non-Executive Director
Corporate
Dr John Bishop, e: j.bishop@riversideenergy.com.au, m: +61 418 373 429
Level 8, 350 Collins St, Melbourne, Australia, 3000
14. Firth of Forth
Amble
Thames Estuary
Whitehaven
Liverpool Bay
Riverside’s Projects
* Six granted UCG licences + two applications, REL: 100%
* Inserts show licence boundaries & seismic coverage
* Areas chosen for previous mining & good infrastructure
* CCS / EOR potential in North & Irish Sea oil/gas fields
* Negotiating for onshore licences
15. Firth of Forth: “the best site”
REL model of the Lower
Coal Measures in the
Firth of Forth
• Described by REL’s consultants as “arguably
the best UCG project in Europe”
• Approx 1 billion tonnes of coal estimated
• Potential for CCS / EOR via existing
infrastructure to North Sea oil & gas fields
• Potential for extensive underlying oil shales
Extensive offshore workings
beneath the Firth of Forth.
REL’s licences in solid red.
16. • Dr John Bishop, FAICD; CEO. John is a geophysicist by training with more than 30 years
involvement in the resources industry. He was the founding Managing Director of
Carbine Tungsten Ltd (ASX: CNQ) and founding Chairman of KUTh Energy Ltd (ASX: KEN).
• General Manager. The GM is a mechanical engineer with 17 years experience, mostly
in the power generation industry; including 4 years as manager of a UCG project,
taking it from concept to commissioning. He is currently completing a large power
station renewal and will be available in early 2013.
• Dr John Rippon, Consultant. John is a deep mine geologist with more than 40 years
experience in the UK coal industry. He is a UCG Consultant with the Institute of
Petroleum Engineering (IPE) at Heriot-Watt University and has been involved with
several UCG studies across the UK.
• Prof. Brian Smart, FREng, FRSE, FIMMM, CEng; Advisor. Brian is a previous Head of the
IPE and Vice Principal at Heriot-Watt University. Brian has introduced British
engineering degrees to several countries and has close connections to China, Middle
East, SE Asia and Russia. He has a special interest in UCG and is a co-author of the
2006 study into the feasibility of UCG under the Firth of Forth.
The Technical Team
17. Riverside’s Strategy
1. Acquire a portfolio of large-tonnage UCG permits, in stable regions
with high energy costs and a strong desire for energy security: DONE
2. Acquire experienced team of engineers to design, build and operate
syngas plant: READY
3. Locate site for first operation and obtain offtaker agreements:
UNDERWAY
4. Procure sufficient funding for pilot gas flaring: NEXT STEP*
5. Listing planned post pilot flaring to maximise valuation
* To be at least partially funded by Riverside’s conventional coals
18. Supplementary Slides
Riverside’s Firth of Forth UCG Project. Schematics and quotes from UK Dept
of Trade and Industry 2006 report: ‘Creating the Coalmine of the 21st Century,
The Feasibility of UCG under the Firth of Forth’
“The FoF is well placed to provide commercial
quantities of UCG gas for power stations and
industrial complexes located along its shoreline.”
(DTI, 2006)
19. Coal for Conventional Mining
(1) Amble thermal coal
• Multiple shallow seams of high calorific
value thermal coal overlie the UCG targets.
• These seams were mined in the adjacent
Ellington Mine (closed 2005), and
• Were extensively explored by the National
Coal Board in the 1980s.
• Recent evaluation for Riverside suggests a
net (ie, saleable) tonnage of at least 80Mt.
Amble thermal coal : Riverside licence
boundary in red, Ellington mine licence in
purple, NCB exploration in solid blue
20. Coal for Conventional Mining
• Multiple shallow seams of high calorific
value thermal coal overlie the UCG targets.
• These seams were mined in the adjacent
Ellington Mine (closed 2005), and
• Were extensively explored by the National
Coal Board in the 1980s.
• Recent evaluation for Riverside suggests a
net (ie, saleable) tonnage of at least 80Mt.
(1) Amble thermal coal
Amble thermal coal : Riverside licence
boundary in red, Ellington mine licence in
purple. Plus NCB exploration borehole
collars (in green) and seismic lines
21. Coal for Conventional Mining
• At Whitehaven, seams of metallurgical coal
sub-crop close to the coast and dip offshore.
• 900m long access drifts from 1990s
operation, may allow a quick and low-cost
pre-mining development
• Excellent infrastructure including working
railway within 100m of planned portal
• Total tonnage is estimated at ~1Bt with a
significant proportion suitable for mining.
(2) Whitehaven coking coal
Whitehaven coking coal : two offshore
and one onshore licences. Showing some
borehole collars (in blue) and seismic lines
22. UCG Capital Requirements
1. A pilot gas flaring, proof-of-concept, operation is estimated to cost
~£20m and take up to 18 months to complete. The information
obtained will be used to prepare a BFS for a commercial operation.
2. A gas cleaning plant providing syngas to end-users will cost ~£100m.
With offtake agreements, up to 50% of this amount can be debt
funded with the balance raised at IPO.
23. UCG Rough Financials
Assume an energy content of 25GJ/t (eg, FoF); 75% recovery and 75%
efficiency to convert to Syngas. For a ‘mining’ rate of 1Mtpa, and a
discounted UK gas price of £5 per GJ:
• Gross revenue is £70Mpa, (Capex ~ £100M)
Assuming an overall ‘life of mine’ cost (ie capex+opex) of £1 per GJ
(LLNL quote US$1.36 per GJ and Carbon Energy, AU$1.25 per GJ),
then:
• Net Revenue is ~£56M for every 1Mt of coal gasified
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Note: most companies are planning for an on-site ‘value-adding’ activity:
eg, gas-to-liquids (Linc); electricity generation (Carbon); fertiliser (Liberty)
(Syngas from 1Mtpa (gross) will power ~200MW power station)
