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Coelacanth Energy Inc. (TSXV: CEI) ("Coelacanth" or the "Company") announces that it has secured a $52 million bank credit facility and has commenced a 4-well drilling program at Two Rivers East.
TWO RIVERS EAST PROJECT
Coelacanth Energy (TSXV:CEI) is a junior oil and natural gas exploration and development company exploring the prolific Montney region in northeastern British Columbia, Canada. Coelacanth is strategically positioned to harness the potential of one of the most resource-rich natural gas basins in North America with a substantial landholding of approximately 150 net sections in the Two Rivers area of Montney.
The company is in the process of deploying $ 80 million to facilitate the smooth transition from exploration to production. Coelacanth’s financial health is further evidenced by its $64.4 million in working capital as of Q2 2024.
Coelacanth’s landholdings are strategically located in the Two Rivers area of Montney, giving it access to a highly productive portion of the basin. Unlike many junior exploration companies, Coelacanth is drill-ready, positioning it favorably among its peers. By securing significant infrastructure and landholdings, Coelacanth ensures its ability to tap into the natural gas and oil resources that lie beneath its properties, a key advantage in the competitive Montney region.
Company Highlights
- The company holds approximately 150 net sections of land in the Two Rivers area, a prolific oil and liquids rich natural gas region.
- Coelacanth is fully permitted and financially secure, with $64.4 million in working capital as of Q2 2024 and a $52 million credit facility with its main lender.
- The company is spending approximately $80 million to construct pipeline and facility infrastructure to bring production on in April 2025.
- The company’s strategic location in Montney places it near major producers like ARC Resources, Tourmaline Oil Corp, Shell, and ConocoPhillips.
- Two Rivers East, its primary project, boasts 1,532 (thousand barrels of oil equivalent) mboe per well in proved and probable reserves.
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Coelacanth Energy
Investment Insight
Coelacanth presents a compelling investment opportunity with its ownership of approximately 150 net sections in the Montney Formation in the Two Rivers oil and liquids rich natural gas region, boasting $64.4 million in working capital and a strategic position near major producers.
Overview
Coelacanth Energy (TSXV:CEI) is a junior oil and natural gas exploration and development company, focusing primarily on the prolific Montney region in northeastern British Columbia, Canada. With a substantial landholding of approximately 150 net sections in the Two Rivers area of Montney, Coelacanth is strategically positioned to harness the potential of one of the most resource-rich natural gas basins in North America. This company sets itself apart with its well-structured growth strategy, financial stability, and commitment to sustainability, making it one of the promising junior players in the region.
Coelacanth Energy has established a strong foundation to deliver on its future production targets by ensuring it is fully permitted and funded to embark on its infrastructure developments. The company is in the process of deploying $ 80 million to facilitate the smooth transition from exploration to production. Coelacanth’s financial health is further evidenced by its $64.4 million in working capital as of Q2 2024. This financial cushion not only supports ongoing infrastructure projects but also provides the company with the flexibility to expand its operations.
Capital deployed for project development will be allocated towards constructing processing facilities, pipelines, and necessary gathering lines, which are all crucial components for transporting and processing oil and gas. With processing contracts secured for up to 60 million cubic feet per day (mmcf/d) and long-term gas takeaway agreements for 100 mmcf/d, Coelacanth is well-positioned to scale its production quickly and efficiently. The company aims to have its infrastructure fully operational by mid April 2025, ramping up cashflow, marking a significant milestone in its transition to a full-scale production company.
The Montney Formation is recognized as one of the most significant natural gas reserves in North America, covering large portions of British Columbia and Alberta. Known for its high levels of natural gas and natural gas liquids (NGLs), Montney has attracted numerous large oil and gas producers, including companies like Canadian Natural Resources (CNQ), Shell, ARC Resources (ARX), Tourmaline Oil Corp (TOU), and ConocoPhillips (COP). The presence of such large players highlights the importance of this region in contributing to both the Canadian and global energy markets.
Coelacanth’s landholdings are strategically located in the Two Rivers area of Montney, giving it access to a highly productive portion of the basin. Unlike many junior exploration companies, Coelacanth is drill-ready, positioning it favorably among its peers. By securing significant infrastructure and landholdings, Coelacanth ensures its ability to tap into the natural gas and oil resources that lie beneath its properties, a key advantage in the competitive Montney region.
Two-Pronged Strategy
Coelacanth Energy Inc. has adopted a well-defined two-pronged strategy for growth, which focuses on both immediate production goals and long-term resource development. This approach provides a balanced focus on infrastructure development and resource delineation.
Coelacanth is focused on delineating its land base resources alongside infrastructure development. This involves drilling wells to explore and prove the extent of hydrocarbon deposits across multiple zones within the Montney Formation. By continuing to delineate its resources, the company aims to demonstrate the productivity and economic viability of its assets, which is critical for long-term growth. The delineation process also helps Coelacanth de-risk its projects, ensuring that future drilling activities are economically sound.
Company Highlights
- The company holds approximately 150 net sections of land in the Two Rivers area, a prolific oil and liquids rich natural gas region.
- Coelacanth is fully permitted and financially secure, with $64.4 million in working capital as of Q2 2024 and a $52 million credit facility with its main lender.
- The company is spending approximately $80 million to construct pipeline and facility infrastructure to bring production on in April 2025.
- The company’s strategic location in Montney places it near major producers like ARC Resources, Tourmaline Oil Corp, Shell, and ConocoPhillips.
- Two Rivers East, its primary project, boasts 1,532 (thousand barrels of oil equivalent) mboe per well in proved and probable reserves.
Key Projects
Two Rivers East and Two Rivers West
Compelling test results and initial reserves bookings
The Two Rivers East project is Coelacanth’s primary development focus. This area has shown significant potential for oil and gas production, with initial tests yielding compelling results. The proved and probable reserves (P+P) for Two Rivers East are estimated at 1,532 mboe per well, with approximately 30 percent of the reserves comprising oil and NGLs. Initial production tests from wells in the Lower Montney zone have confirmed the commerciality of this resource, with one well producing 1,345 barrels of oil equivalent per day at (boepd) at 61 percent oil, and three others producing an average of approximately 1,300 boepd at averaging 38 percent oil. These results underscore the viability of Two Rivers East as a key asset for Coelacanth’s future growth.
The Two Rivers West project also holds considerable proved and probable reserves of approximately 1,148 mboe, 34 percent of which consist of oil and NGLs. Similar to Two Rivers East, initial production tests have demonstrated strong deliverability. For example, the Upper Montney well in this region produced an average of 1,284 boepd during its test phase. These tests indicate that the Two Rivers West project will contribute significantly to Coelacanth’s production capabilities as it continues to expand its operations.
Coelacanth’s strategic location in the Montney, coupled with large contiguous landholdings and established infrastructure, positions the company for long-term growth. The company’s land position in the light oil window of Montney further enhances its value, as light oil typically commands a premium over heavier oil grades. Coelacanth is the number one landholder in this lucrative area, providing it with a significant competitive edge.
Moreover, Coelacanth’s management team has a proven track record, having successfully built and sold six oil and gas companies prior to founding Coelacanth. This experience adds credibility to the company’s long-term growth strategy, instilling confidence that Coelacanth can replicate its past successes in the Montney region.
Board and Management
Rob Zakresky – President and CEO
Rob Zakresky has a significant background in the oil and gas sector, previously serving as the president and CEO of Leucrotta Exploration as well as five additional predecessor companies. He has been with Coelacanth Energy since its inception and is recognized for his strategic leadership and focus on enhancing shareholder value. His expertise in financial management and operations is reflected in his approach to driving the company's growth.
Bret Kimpton – Vice President of Operations and COO
Bret Kimpton joined Coelacanth Energy in 2022, bringing a wealth of experience from his previous role as vice president of production at Storm Resources, where he contributed to significant production growth. He has a strong background in construction and operations, especially in the Montney region of British Columbia, managing various fields. His role at Coelacanth focuses on overseeing operational efficiency and implementing the company's growth strategies.
Nolan Chicoine – Vice President of Finance and CFO
Nolan Chicoine has also been with Coelacanth Energy since its inception. His responsibilities encompass financial oversight, including financial planning, reporting, and analysis. He plays a crucial role in aligning the financial strategies with the company's operational goals. His background includes significant experience in financial management as CFO for Leucrotta Exploration, Crocotta Energy, and Chamaelo Energy.
Coelacanth Energy Inc. Announces $52 Million Revolving Bank Credit Facility and Fall Drilling Program
Coelacanth has commenced drilling on the 5-19 Pad at Two Rivers East with the first well spud on September 1st. The complete program consists of drilling and completing 3 Lower Montney wells, completing 1 previously drilled Upper Montney well, and drilling a Bluesky disposal well for a total cost of approximately $36 million. The 4 pad wells are scheduled to be completed starting late October 2024.
As previously released, the three 5-19 Lower Montney wells drilled in 2023 had tested at a per well average of 1,338 boe/d for a combined rate of 4,014 boe/d (54% light oil). The program above will be additive to this once the Two Rivers East facility is constructed and on-stream in April 2025. The Upper Montney has not produced in the immediate area but has been very prolific in the greater region. Management is looking forward to proving up the commerciality of this zone in the area as well as establishing expected oil/gas production mix.
Strategic benefits of this program are as follows:
- Accelerating the growth profile of the overall company
- Adding material drilling inventory through proving commerciality of Upper Montney
- Reducing risk in processing and transportation commitments
- Minimizing disruptions on start-up of new facility by having wells completed in advance
- Increasing financial and operational flexibility in 2025 capital program
- Creating additional production certainty for future decisions on third-party processing and build-out of additional facilities
Also as previously released, Coelacanth obtained all regulatory approvals to construct a new battery facility ("Facility") at Two Rivers East designed for gas compression/dehydration, oil treating and water handling, plus gathering and transport lines to connect from the 5-19 Pad through the Facility to a mid-stream gathering line. Construction of the pipelines and the facility site have already commenced and estimated to be operational in April 2025.
BANK CREDIT FACILITY AND FINANCIAL UPDATE
Coelacanth secured 2 revolving bank credit facilities for a total of $52 million from its primary lender. The facilities are backed by reserves at Two Rivers West plus a $45 million Letter of Credit from a third party. The commitment from the third party is for a 2-year term. During the term, Coelacanth expects that the lending value of producing reserves at Two Rivers East will allow for the credit facility to be renegotiated and the Letter of Credit to be returned.
Coelacanth had also previously secured a commitment for approximately $22 million from a Mid-Stream company to finance a pipeline connecting Coelacanth facilities to the Mid-Stream Company's gathering system.
With over $60 million cash and no debt at the end of Q2 2024, Coelacanth estimates it will have approximately $40 million net debt plus the mid-stream commitment once the drilling program is completed and the facility is operational. Once operational and pending drilling success on the above program, Coelacanth's production should stabilize at over 6,000 boe/d until additional wells are drilled in the summer of 2025.
SHARE PURCHASE WARRANTS
As part of the $80 million bought deal financing completed in November 2023, Coelacanth had issued 33.3 million share purchase warrants ("Warrants") with a strike price of $1.05 per share that expire November 15, 2024. Coelacanth's Board of Directors has determined that extending the Warrant expiry date to June 30, 2025 is in the best interest of the Company and management will start the regulatory process to extend such Warrants.
Proceeds of the Warrant exercise, if any, would be used for additional pad drilling at Two Rivers East scheduled for summer of 2025.
FOR FURTHER INFORMATION PLEASE CONTACT:
Coelacanth Energy Inc.
2110, 530 - 8th Ave SW
Calgary, Alberta T2P 3S8
Phone: 403-705-4525
www.coelacanth.ca
Mr. Robert J. Zakresky
President and Chief Executive Officer
Mr. Nolan Chicoine
Vice President, Finance and Chief Financial Officer
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
Oil and Gas Terms
The Company uses the following frequently recurring oil and gas industry terms in the news release:
| Liquids | |
| Bbls | Barrels |
| Bbls/d | Barrels per day |
| NGLs | Natural gas liquids (includes condensate, pentane, butane, propane, and ethane) |
| Natural Gas | |
| Mcf | Thousands of cubic feet |
| Mcf/d | Thousands of cubic feet per day |
| MMcf/d | Millions of cubic feet per day |
| Oil Equivalent | |
| Boe | Barrels of oil equivalent |
| Boe/d | Barrels of oil equivalent per day |
Disclosure provided herein in respect of a boe may be misleading, particularly if used in isolation. A boe conversion rate of six thousand cubic feet of natural gas to one barrel of oil equivalent has been used for the calculation of boe amounts in the news release. This boe conversion rate is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
Product Types
The Company uses the following references to sales volumes in the news release:
Natural gas refers to shale gas
Oil refers to tight oil
NGLs refers to butane, propane and pentanes combined
Liquids refers to tight oil and NGLs combined
Oil equivalent refers to the total oil equivalent of shale gas, tight oil, and NGLs combined, using the conversion rate of six thousand cubic feet of shale gas to one barrel of oil equivalent as described above.
Forward-Looking Information
This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "may", "will", "should", "believe", "intends", "forecast", "plans", "guidance" and similar expressions are intended to identify forward-looking statements or information.
More particularly and without limitation, this document contains forward-looking statements and information relating to the Company's oil, NGLs and natural gas production and capital programs. The forward-looking statements and information are based on certain key expectations and assumptions made by the Company, including expectations and assumptions relating to prevailing commodity prices and exchange rates, applicable royalty rates and tax laws, future well production rates, the performance of existing wells, the success of drilling new wells, the availability of capital to undertake planned activities and the availability and cost of labor and services.
Although the Company believes that the expectations reflected in such forward-looking statements and information are reasonable, it can give no assurance that such expectations will prove to be correct. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the risks associated with the oil and gas industry in general such as operational risks in development, exploration and production, delays or changes in plans with respect to exploration or development projects or capital expenditures, the uncertainty of estimates and projections relating to production rates, costs and expenses, commodity price and exchange rate fluctuations, marketing and transportation, environmental risks, competition, the ability to access sufficient capital from internal and external sources and changes in tax, royalty and environmental legislation. The forward-looking statements and information contained in this document are made as of the date hereof for the purpose of providing the readers with the Company's expectations for the coming year. The forward-looking statements and information may not be appropriate for other purposes. The Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
Test Results and Initial Production Rates
The C5-19 Lower Montney well was production tested for 5.8 days and produced at an average rate of 736 bbl/d oil and 2,660 mcf/d gas (net of load fluid and energizing fluid) over that period which includes the initial cleanup where only load water was being recovered. At the end of the test, flowing wellhead pressure and production rates were stable.
The D5-19 Lower Montney well was production tested for 12.6 days and produced at an average rate of 170 bbl/d oil and 580 mcf/d gas (net of load fluid and energizing fluid) over that period which includes the initial cleanup where only load water was being recovered. At the end of the test, flowing wellhead pressure and production rates were stable.
The E5-19 Lower Montney well was production tested for 11.4 days and produced at an average rate of 312 bbl/d oil and 890 mcf/d gas (net of load fluid and energizing fluid) over that period which includes the initial cleanup where only load water was being recovered. At the end of the test, flowing wellhead pressure was stable, and production was starting to decline.
A pressure transient analysis or well-test interpretation has not been carried out on these four wells and thus certain of the test results provided herein should be considered to be preliminary until such analysis or interpretation has been completed. Test results and initial production rates disclosed herein, particularly those short in duration, may not necessarily be indicative of long-term performance or of ultimate recovery.
Production Rates
Any references to peak rates, test rates, IP30, IP90, IP180 or initial production rates or declines are useful for confirming the presence of hydrocarbons, however, such rates and declines are not determinative of the rates at which such wells will continue production and decline thereafter and are not indicative of long-term performance or ultimate recovery. IP30 is defined as an average production rate over 30 consecutive days, IP90 is defined as an average production rate over 90 consecutive days and IP180 is defined as an average production rate over 180 consecutive days. Readers are cautioned not to place reliance on such rates in calculating aggregate production for the Company.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/225700
News Provided by Newsfile via QuoteMedia
TRILLION ENERGY PROVIDES UPDATE ON SASB VS INSTALLATION
Trillion Energy International Inc. (" Trillion " or the "Company ") (CSE: TCF) (OTCQB: TRLEF) (Frankfurt: Z62) is pleased to provide an update on the velocity string installation program at the SASB gas field.
On October 27 th the snubbing unit was positioned over the Akcakoca-3 well where 2 3/8" production tubing ("velocity string" or "VS") was ran into the well through the existing 4 ½ tubing. The operation was completed on October 29 th . The well continued to flow throughout the operation.
Following the VS installation, Akcakoca-3 production increased from approximately 2.0 MMcf/d (average production for the 27 days prior to installation) to 2.6 MMcf/d (average production first 4 days post VS). We continue to monitor production from the well at this time.
On October 30 th , 2024 a 2 3/8 th velocity string was ran into the West Akcakoca-1 well using the snubbing unit. The operation was completed by November 1 st , where the velocity string reached a total measured depth (MD) of 3,496 meters. The West Akcakoca-1 well was not producing prior to the operation and gas production is expected to resume following nitrogen stimulation being applied.
Currently, VS is being run into the Guluc-2 well. The velocity strings are being installed with the objective of reducing water loading issues in the SASB gas wells.
About the Company
Trillion Energy International Inc is focused on oil and natural gas production for Europe and Türkiye with natural gas assets in Türkiye. The Company is 49% owner of the SASB natural gas field, a Black Sea natural gas development and a 19.6% (except three wells with 9.8%) interest in the Cendere oil field. More information may be found on www.sedar.com , and our website.
Contact
Arthur Halleran, Chief Executive Officer
Brian Park, Vice President of Finance
1-778-819-1585
e-mail: info@trillionenergy.com;
Website: www.trillionenergy.com
Cautionary Statement Regarding Forward-Looking Statements
This news release may contain certain forward-looking information and statements, including without limitation, statements pertaining to the Company's ability to obtain regulatory approval of the executive officer and director appointments. All statements included herein, other than statements of historical fact, are forward-looking information and such information involves various risks and uncertainties. Trillion does not undertake to update any forward-looking information except in accordance with applicable securities laws.
These statements are no guarantee of future performance and are subject to certain risks, uncertainties, delay, change of strategy, and assumptions that are difficult to predict and which may change over time. Accordingly, actual results and strategies could differ materially and adversely from those expressed in any forward-looking statements as a result of various factors. These factors include unforeseen securities regulatory challenges, COVID, oil and gas price fluctuations, operational and geological risks, changes in capital raising strategies, the ability of the Company to raise necessary funds for development; the outcome of commercial negotiations; changes in technical or operating conditions; the cost of extracting gas and oil may increase and be too costly so that it is uneconomic and not profitable to do so and other factors discussed from time to time in the Company's filings on www.sedar.com, including the most recently filed Annual Report on Form 20-F and subsequent filings. For a full summary of our oil and gas reserves information for Turkey, please refer to our Forms F-1,2,3 51-101 filed on www.sedar.com, and or request a copy of our reserves report effective December 31, 2022 and updated January 31 2023.
News Provided by GlobeNewswire via QuoteMedia
New Resource Booking
HIGHLIGHTS
- Prospective resources of 712 billion cubic feet (2U) booked in Sub-Block B of ATP 2077
- Farmout campaign for the Diona Block (Sub-Block C of ATP 2077) well under way
- Updated contingent resources for ATP 2044 expected before year end
Although one licence, ATP 2077 is broken into 3 geographically separate sub blocks (see map below). Sub-Block A is located immediately proximate to ATP 2044 and contains similar Taroom Trough geology. A contingent resource booking was announced when the block was awarded (see ASX announcement of 19 August 2024). Sub-Block B also overlies the Taroom Trough, however given the further distance from Project Grandis the resource here is considered prospective in nature - at this stage. Sub-Block C lies outside the Taroom Trough, is immediately adjacent to existing gas infrastructure and is prospective for shallower conventional oil and/or gas drilling targets.
Location map of ATP 2077 showing Sub-Blocks A, B and C
Based on recent internal technical work undertaken, Elixir has booked a prospective resource estimate for ATP 2077 Sub-Block B – see table below.
Notes to Prospective Report Table:
1. These are un-risked prospective resources that have not been risked for geological success or the chance of development. The chance of success for tight sands and deep coal was estimated at 65% and 27% respectively. Both targets are considered trapped in an unconventional setting. The chance of commercial development is estimated at 50% for each.
2. Each reservoir target was evaluated probabilistically and the totals added arithmetically.
3. Prospective Resources have been assessed on the basis that they are unconventional in nature.
4. ATP is an Authority To Prospect, which allows a company to explore for hydrocarbons in Queensland.
5. Prospective Resources are those estimated quantities of petroleum that may potentially be recovered by the application of a future development project(s) related to undiscovered accumulations. These estimates have both an associated risk of discovery and a risk of development. Further explorations appraisal and evaluation is required to determine the existence of a significant quantity of potentially moveable hydrocarbons. These Prospective Resource estimates are for the tight sandstones and deep Permian coals within Block B only. The estimates assume the same Basin Centered Gas (BCG) play is present, and similar reservoir parameters to ATP 2044 have been used. The block is mature for drilling, and exploration drilling may occur in the years to come.
6. Elixir’s technical team analyzed seismic, drilling, logging and test data to make these estimates. Specific analysis undertaken included seismic interpretation, geological correlations, core analysis, wireline petrophysics, chromatographic gas analysis and production test analysis.
7. Further detailed notes on the background to the preparation of the Prospective Resource Report are set out in Appendix 1.
In ATP-2077 Sub-Block C (also known as the Diona Block), Elixir is currently conducting farmout negotiations under which it is seeking an incoming party to fund the cost of an exploration well. The Company will provide an update on these in due course.
This article includes content from Elixir Energy, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
Charbone Hydrogen
Investor Insight
Charbone Hydrogen (TSXV:CH) offers a compelling investment opportunity in the US$89 billion green hydrogen market, leveraging a decentralized approach for scalable plant deployment and focusing on environmentally friendly production to reduce carbon footprints.
Overview
Charbone Hydrogen (TSXV:CH,OTCQB:CHHYF,FWB:K47) is the only publicly listed green hydrogen firm in Canada looking to expand across North America (US and Canada) with a pipeline of new projects. This is an opportune time for Charbone as the world races to find effective solutions to meet its net-zero ambitions by 2050. Green hydrogen could be a perfect fit as a potentially low-emitting fuel source. There is an increasing realization of the potential of hydrogen in serving as a low-emissions substitute for fossil fuels in residential as well as industrial use cases.
The Government of Canada has laid out its hydrogen policy, aiming to meet nearly 30 percent of its energy requirement in 2050 by hydrogen, as well as become one of the top three clean hydrogen producers globally. The presence of abundant hydroelectric power, favorable government policies, and a progressive tax regime should boost hydrogen production in the country. The 2023 federal budget includes more than $17 billion in tax credits over the next five years to help fund clean energy projects, including hydrogen.
Green hydrogen: key element to decarbonize the world
The US Department of Energy expects to produce 10 million metric tons (MMT) of hydrogen annually by 2030 and eventually reach 50 MMT by 2050. According to US Deputy Secretary of Energy David Turk, 50 MMT of hydrogen could power every bus, train, plane and ship in the US.
Charbone stands to benefit from rapid adoption of hydrogen as an alternative to fossil fuels. Moreover, Charbone’s focus solely on “green hydrogen” should further its position among investors looking for opportunities to invest in sustainable energy solutions. Green hydrogen is produced when the energy used to power electrolysis comes from renewable sources like wind, water, solar or nuclear. Charbone has clearly stated its intentions to leverage hydropower and nuclear energy to produce hydrogen.
Project Pipeline and Key Partnerships
Carbone forged strong partnerships to execute its business model.
The company plans to construct 16 hydrogen projects across North America (six in Canada and 10 in the US) over the next four years. The first of which is under construction at Sorel-Tracy in Quebec. The Sorel-Tracy facility is located on a 40,000-square-meter land parcel along Quebec Highway 30, known as the “Steel Highway” because of the numerous steel mills and process plants operating along the highway.
The construction of Phase 1 of its Sorel-Tracy facility is being done in partnership with EBC, one of the largest construction companies in Quebec. EBC has a proven track record of designing and building facilities in Canada and the US. The partnership agreement gives EBC the right of first refusal to construct additional Sorel-Tracy phases, as well as one or all of Charbone’s facilities within the North American market.
In addition, Charbone has entered into several other strategic partnerships all aimed to expand its footprint in North America. The company entered into a special consultancy agreement with Enki GéoSolutions for potential partnership proposals as a co-operator and distributor of an emerging form of clean and renewable hydrogen, known as white or natural hydrogen.
In June 2024, Carbone executed a supply agreement for a complete containerized electrolyzer system ready for shipment to its flagship green hydrogen site in the City of Sorel-Tracy, Quebec. The electrolyzer has a higher capacity than originally planned and will significantly enhance initial operational capacity estimates. The company also acquired its first tube trailer for the transport and bulk delivery of compressed green hydrogen produced from the City of Sorel-Tracy, Quebec flagship project to local and domestic customers.
Superior Plus
This partnership allows Charbone to sell hydrogen produced at the Sorel-Tracy facility to Superior Propane, a subsidiary of Superior Plus. Such supply agreements ensure that Charbone can generate cash flow immediately following the commencement of production.
Carbone Hydrogen entered into an off-take partnership with Superior Plus on the supply and
distribution of green hydrogen.
NEK Community Broadband
Another such supply agreement was signed in November 2023 with NEK Community Broadband, which ensures the supply of green hydrogen in the Northeast Kingdom of the state of Vermont (USA). NEK Broadband is building a high-speed broadband infrastructure and plans to install a hydrogen fuel cell backup system for a reliable power supply.
Oakland County Economic Development Department, Michigan
Further advancing its goal of US expansion, Charbone signed a memorandum of understanding in December 2023 with Michigan’s Oakland County Economic Development Department to set up Charbone’s first green hydrogen facility in the United States. Oakland County is home to major automakers, and a green hydrogen facility in their proximity will support the effort of producing environmentally friendly mobility options.
Being the only publicly listed green hydrogen player in Canada, Charbone offers investors a unique opportunity to participate in the rise of green hydrogen as a potential low-emitting alternative to fossil fuels.
Management Team
Dave Gagnon – Chairman and CEO
Dave Gagnon has been chairman and chief executive officer of Charbone Hydrogen Corporation since April 21, 2022. He has been a climate tech entrepreneur for the last 25 years, and was the first entrepreneur in Canada to start a wind turbine company and offer a new alternative energy solution in North America. Gagnon also worked with an institutional investor that manages several public pension plans, Caisse de depot et placement du Quebec, where he gained deep knowledge of the financial markets.
Benoit Veilleux – Chief Financial Officer
Benoit Veilleux was appointed as the CFO of Charbone on August 15, 2022. Veilleux has over 15 years of experience in corporate accounting and finance. He began his professional career at KPMG in 2003, where he managed and coordinated audit teams for public companies until 2010. Since then, he has worked with a number of companies including Air Liquide Canada and the Hypertec Group.
Daniell Charette – Chief Operating Officer
Daniell Charette has been the chief operating officer of Charbone since February 2019. He brings over 25 years of experience in running and managing renewable energy companies. He has worked in senior leadership roles with several renewable companies including NEG Micon A/S, Vestas and Brookfield Power. He has served on various association boards and councils, including the Canadian Wind Energy Association, Association Québécoise des Producteurs d’Énergie Renouvelable, and Latin Wind Energy Association.
Francois Vitez – Director
Francois Vitez is a hydropower and energy storage expert with more than 24 years of experience in the development, engineering and construction management as well as operations and maintenance of hydropower and energy storage projects in North America and internationally. He is a board member and chair of the Value of Hydropower committee at Waterpower Canada, vice-chair of the Energy Storage Association of Canada, board member of the California Energy Storage Association, and member of the International Hydropower Association.
Patrick Cuddihy - Hydrogen Operations Team
Patrick Cuddihy is a seasoned operations leader with over 20 years of experience at Air Liquide Canada, to its hydrogen operations team. Patrick brings a wealth of expertise in managing industrial gas production and distribution, having held senior roles including network sales director for Quebec Region, general manager for Pacific Region, director of procurement services, and director of logistics and assets for the Eastern Region.
Quarterly Activities Report for the Period Ended 30 September 2024
HIGHLIGHTS
- Daydream-2 well successfully stimulated and flow tested
- Gas flowed from multiple stimulated zones, including deep coals for the first time
- ATP 2077 formally awarded and 173 Bcf additional contingent resources booked
- Elixir’s fiscal position remains strong - $10M at quarter end
MANGAGING DIRECTOR’S REPORT TO SHAREHOLDERS FOR THE QUARTER
The Daydream-2 appraisal well was again the key focus for Elixir during the quarter. The considerable successes of this program (albeit with some ebbs and flows typical of an early stage appraisal program) has provided the Company with a very strong platform to continue to de-risk the Grandis Project.
North America’s considerable experience in large unconventional plays over the last two decades indicates that having multiple operators try different approaches to “cracking the code” to most effectively liberate gas presents by far the optimal approach to really open up such plays.
In this context Elixir is very pleased to be currently accompanied by other active explorers in Queensland’s Taroom Trough. Collectively, considerable sums are being invested, contingent resources booked, knowledge transferred and service sector capabilities continuously improved.
During the last quarter Elixir’s contributions to these collective efforts were material and multiple. These included flowing gas from five out of six stimulated zones, including from deep coals for the first time in this region.
Elixir expects the various current – and likely new – Taroom Operators to expand their efforts in the years to come - to ultimately deliver a lot of gas into the nearby infrastructure that can readily take it to desperately short domestic and international markets.
In the current early stage of such a large play, the teething issues that typically arise include rationing of the required equipment, service sector companies requiring different approaches, etc. Elixir has experienced some of these – but we are convinced that we can see these already being ironed out. For instance, the collective efforts in the region are already leading to interest from the likes of new service sector and infrastructure companies, with highly relevant international expertise and equipment.
During the quarter Elixir was formally granted ATP 2077 – which immediately added 175 Bcf of new contingent resources. The timeline from being notified as preferred tenderer to formal award was very rapid – reflecting the strong Queensland regulatory environment generally and the well established oil and gas presence in the immediate region specifically.
Post the end of the quarter, Elixir was pleased to execute a Memorandum of Understanding with Australian Gas Infrastructure Group (AGIG) to provide a framework under which to better investigate the development of the required infrastructure to take Taroom sourced gas to the nearby market interfaces. Elixir sees this is also an area of potential fruitful cooperation.
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