'Promising' headway at Pace despite weather hurdle

AMERICAN Power has reported promising preliminary lab results from its second phase of exploration drilling at the Pace coal project in Montana, but the company will have to wait until spring for the third phase of drilling.
'Promising' headway at Pace despite weather hurdle 'Promising' headway at Pace despite weather hurdle 'Promising' headway at Pace despite weather hurdle 'Promising' headway at Pace despite weather hurdle 'Promising' headway at Pace despite weather hurdle

Near the site of the planned Pace Coal Project in Montana. Courtesy American Power.

Donna Schmidt

The company said Thursday that initial results from three core samples taken from Phase II at the planned complex in Judith Basin County have reflected a high energy content range of 12,210-13,056 BTU on a moisture and ash-free basis.

Sulfur content is ranging between 3.2-4.9% on a dry basis, and ash content is coming in between 30.2-43.9%.

Officials also revised earlier lab results from Pace’s initial phase; while preliminary reports reflected energy content ranging between 11,462-18,224 BTU per pound, a retest by standard Laboratories has returned a new range of 11,462-12,081 MAF Btu with no changes in sulfur and ash content.

“We are very excited with the laboratory results for our 2011 drilling campaign; the results keep showing promising results for the Pace coal project's future development,” American Power chief executive officer Al Valencia said.

“During 2011, we completed the first two phases of our ambitious exploration program with a total of 14,076 feet drilled.”

The third phase of drilling has been suspended, Valencia said, due to weather conditions that were resulting in decreased productivity returns and increased costs.

“We anticipate our drilling program to resume on the spring of 2012 and focus on the eastern area of the property, where our team has identified the most promising results to date,” he said.

In all, American Power's planned exploration drilling program consists of 61 drilling sites and will involve drilling of 53,875ft total.

The intent of American Power’s drilling program is to classify significant portions of Pace’s coal holdings as proved and probable reserves, and ultimately to establish sufficient resources to support an operations lifespan exceeding 20 years.

The Denver-headquartered company acquired the 29,000 acres that make up the Pace coal project in April 2010.

Estimated resources in place, based on exploration work by Mobil Oil (now ExxonMobil), range from 172 million up to more than 410 million tons of high volatility bituminous B coal.