AJL - AJ Lucas Group

yogi-in-oz said:

Hi Dutchy,

AJL ..... that hammer in the monthly chart,
includes a nice v-bottom on the daily chart,
on the lower extreme of a rounding bottom.

A few key dates to watchover the next month
or so, which may give us lift-off:

31032006 ..... minor changes ... finance-related???

03042006 ..... minor cycle

11042006 ..... significant and positive news???

14042006 ..... negative spotlight on AJL???

28042006 ..... significant and positive ... finances???

02052006 ..... significant and negative news???

12-15052006 ..... minor and positive cycle

17052006 ..... minor and positive news???

24052006 ..... 2 significant cycles here ..... finances???

31052006 ..... minor news???

happy days

yogi

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The Gloucester Basin permit is located approximately 100km north of Newcastle, where gas prices could exceed other major east coast markets such as Sydney and Brisbane. The permit covers an area of 1,050km², with over 200km² of prospective coal measure sequence

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Preliminary core analysis indicates a gross coal thickness of approximately 10.8m in several coal seam splits, with 3 coal seams greater than 2m thick in this hole. The partially penetrated coal seam at the base of the hole had a thickness of at least 4.0m. On visual inspection, the seams contain predominately bright, vitrinite rich, highly cleated and fractured coal with little cleat mineralisation. Coal core and gas sample testing is in progress, with early gas content results showing these coals are gassy.
On the basis of the above intersected coal thickness and preliminary gas content results, the CBM potential of this coal seam sequence is very encouraging.

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31 October 2007
Australian Stock Exchange Limited
Via Electronic Lodgement
Gloucester Basin Drilling Update
During the September quarter, the Lucas/Molopo Gloucester
joint venture (AJ Lucas 70%/Molopo 30%) focused on
progressing the expanded Phase II Gloucester Basin
appraisal programme, comprising the Stratford Production
Pilot and the Gloucester Basin exploration drilling
programme. The five well Stratford production pilot and
the current exploration drilling programme comprising four
part-cored and nine stratigraphic chip holes, have been
designed by the Gloucester JV to establish reserves across
the Gloucester Basin and to ascertain production capabilities
prior to a development decision.
The promising LMG03 production test well was recompleted
with a new progressive cavity pump and
dewatering operations commenced on 28th August. In
previous tests the unstabilised gas flow rates of
666,900scf/d from this well demonstrated the production
potential of the Stratford Pilot area.
Drilling commenced on the first of four new production test
wells on the Stratford Pilot in early September. Stratford #6
was drilled to 660m total depth on 13th September. Precollar
drilling for the second production well Stratford #5
commenced on 26th September. Two additional wells
Stratford 4 and Stratford 8 will be drilled prior to
commencement of a fracture stimulation programme in
November. Pilot production will be gathered at a central
location to facilitate ease of expansion into an early
production scenario if the results match the encouraging
performance of the earlier pilot production in LMG03. A
well redrill is under consideration.
It is anticipated that the new pilot production wells will be
progressively placed on production test during November and December this year.
The first dedicated part-cored exploration hole Weismantel 01 tested the CBM potential of coal seams in the
Dewrang Group below the highly prospective Gloucester Coal Measures in the southern part of the
Gloucester Basin. The hole reached 703m after intersecting a thick, fractured coal seam from 697m to
701m. Seven coal cores were sampled from 459m to 701m. The raw gas content range is 4.3 m³/t to
12.6 m³/t and methane composition is in the range 93% to 96%. These results are very encouraging with
respect to the CBM potential of this previously untested coal seam sequence.

Drilling in Craven 01, the second part-cored hole, reached 707m and now awaits additional light weight
drill rods to be secured to progress drilling to a target depth of 900m. The Craven hole is testing the
prospective Gloucester Coal Measure sequence in the Central portion of the Basin. To date twelve coal
cores less than 1.0 m thick, have been tested from 208m to 648m. Early results show high gas contents in
the range is 3.3 m³/t to 22.1 m³/t and high methane composition up to 96%. The anticipated underlying
thicker coal seams are yet to be drilled.
On 2nd August drilling commenced on Waukivory 01, the third part-cored hole. Thick gassy coals of the
Gloucester Coal Measures have been intersected and sampled. The hole was suspended at 798m on 30th
September and waits a larger rig to progress the hole to its proposed total depth of 1,000m.
The exploration drilling programme was accelerated in August with the mobilisation of a second rig to
commence drilling the nine chip holes and also drill the Stratford production pilot wells. Drilling on the first
chip hole Faulkland 01 commenced on the 8th of August. Faulkland 01 tested the CBM potential in the
deeper far northwestern portion of the Gloucester Basin. The hole was drilled to 930m during the quarter,
before being temporarily suspended short of its proposed total depth of 1,000m on 16th of August. While
the full target sequence has not yet been drilled, only two thin seams warranted sampling for testing.
Options to deepen the hole to assess the full sequence are under consideration.
Allan Campbell
Chairman & Chief Executive Officer

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