Regal Resources Limited (RER) is pleased to announce, its subsidiary Magma, has signed an agreement with the landowners who hold title over the Oak Park location who have agreed to grant Magma exclusive and unimpeded access to the site where the Pilot Test for the Underground Coal To Liquids (UCTL) is planned to occur.
The agreement is for a 12 month period and gives Magma sufficient time to complete construction works and the active operation phase to undertake the UCTL Pilot Test, which is anticipated to begin in the fourth quarter of 2009. The UCTL Pilot Test will be aiming to determine the commercial applications of converting low rank coals (brown coal/lignite) into long chain hydrocarbons (crude oil) in an “in situ” location. This avoids traditional methods of mining or removing coal from the coal seam environment and treating such coals at surface within capital and energy intensive plants. The UCTL process intends to extract the crude oil products from within the coal seam utilizing conventional and widely accessible oil extraction techniques.
The Oak Park location has five existing wells that are in good condition for testing of the UCTL process and were drilled and completed during 2002 as part of a coal seam methane test at this site. The wells have been well maintained and will require little or no modification for use in the UCTL Pilot Test. Regal is currently a 20% shareholder in Magma however shareholder approval is currently being sought (late May 2009) for Magma to become a 100% fully owned subsidiary of Regal.