All those San­jel trucks spot­ted at the Com­fort Inn near Pony Vil­lage Mall are to start a frac­ture stim­u­la­tion pro­gram at wells along Beaver Hill and Radio Hill.

On Octo­ber 6, 2004, a multi-hole cor­ing pro­gram was com­menced on the Methane Energy Corp. leases. Cor­ing was needed to col­lect coal sam­ples so that accu­rate gas con­tent data could be mea­sured. Cores were col­lected, des­orp­tion work was done on the coals and eval­u­a­tion com­pleted by mid 2005. This data, as well as other geo­logic infor­ma­tion, was pro­vided to Sproule Asso­ciates, Inc., an inter­na­tional reser­voir engi­neer­ing firm, for an inde­pen­dent eval­u­a­tion. To date, nat­ural gas analy­ses per­formed on sam­ples from Methane Energy Corp. coal sam­ples and wells indi­cate that the gas is pipeline qual­ity and that the coals are fully sat­u­rated with gas. It is impor­tant to note that tech­ni­cally recov­er­able gas vol­umes do not nec­es­sar­ily qual­ify as proved reserves, and we have not recorded any proven reserves at any of our projects at this time.

Drilling and test­ing pro­grams were then ini­ti­ated at three pilot sites-Beaver Hill, Radio Hill and West­port. A total of twelve exploratory wells have been drilled. Five exploratory wells were drilled and com­pleted at Beaver Hill; two exploratory wells were drilled at Radio Hill with one com­ple­tion; and five exploratory wells were drilled at West­port with four of the wells completed.

In August 2008, the Com­pany retained Baker Energy Ser­vices of Sheri­dan, Wyoming, to pro­vide field man­age­ment ser­vices with respect to a well work-over and frac­ture stim­u­la­tion pro­gram sched­uled for up to five wells located in the Company’s West­port area in Coos Bay, Ore­gon. The pro­posed frac­ture stim­u­la­tion pro­gram is expected to com­mence in mid-August 2008 and will include injec­tion of prop­pant sand and a vari­ety of stim­u­la­tion flu­ids to test and deter­mine the most effec­tive frac­ture stim­u­la­tion tech­nique for use in sub­se­quent wells. Fol­low­ing the stim­u­la­tion pro­gram, the five wells will be placed on a test­ing pro­gram to first recover the injected stim­u­la­tion flu­ids then com­mence a two month period of reser­voir pro­duc­tion analy­sis. As of August 14, 2008, $1,640,000 has been advanced to Baker Energy Ser­vices for the frac­ture stim­u­la­tion program.

Frac­ture stim­u­la­tion is a com­mon oper­a­tion per­formed on both con­ven­tional and uncon­ven­tional gas reser­voirs includ­ing coal bed methane projects. To date, none of the Company’s wells have been treated with a frac­ture stim­u­la­tion uti­liz­ing a prop­pant. The pur­pose of the frac­ture stim­u­la­tion pro­gram is to increase per­me­abil­ity within the reser­voir and enhance well pro­duc­tiv­ity. A suc­cess­ful frac­ture stim­u­la­tion pro­gram is key to con­firm­ing the “proof of con­cept” of the Company’s coal bed methane project in Coos Bay, Oregon.

Methane Energy filed for bank­ruptcy pro­tec­tion ear­lier in the year.

(hat tip/Jody)