Next Fuel focuses on methane that is a byproduct of microorganisms interacting with dissolved bioamenable carbon compounds in coalbeds. The CTG Technology maximizes these natural processes to enable owners of carbonaceous deposits, such as coal and lignite, to enhance and resume commercial scale natural gas production from declining and/or depleted coal bed natural gas (CBNG) wells and/or initiate and sustain biogenic methane production in coal and other carbon formations in which native microorganisms are active.

In its latest form 10-Q filed with the SEC, Next Fuel notes that methane-producing processes can stop or substantially decline when nutrients and/or trace elements that are key to sustaining microbial metabolisms and reproduction decline. In other cases, when suitable substrates (e.g., bioavailable carbonaceous compounds) can no longer be accessed by microorganisms, the gas production ceases.

The Next Fuel CTG process re-introduces amendments designed and tested to the wide range of microorganisms that exist in the seams of coal and other carbonaceous deposits that originally formed the methane gas extracted from CBNG. The company claims that the CTG technology can rejuvenate, resume, and enhance gas production at an attractively low cost.

The proprietary amendments consist of constituents with depolymerizing and structure-altering functions to “condition” coal for the follow-up pathways for gas production. The amendments recipe also contains nutrients (nitrogenous, phosphorus, and other micronutrients), trace vitamins, oxygen scavengers, carbon dioxide, pH adjusters, and others.

In March, Next Fuel completed its previously announced purchase of technology and intellectual property useful in extracting and producing natural gas from coal, lignite and other carbonaceous deposits (the CTG technology) from five individuals. The company at that time said that it planed to focus initially on Asia.

The purchase price for the technology consisted solely of securities, including 3,010,000 shares of common stock and a two-year warrant to purchase an additional 1,000,000 shares.

Simultaneously with the technology acquisition, the company raised $100,000 of new capital through a private sale of 50,000 shares of common stock to San Ding Jiu Yuan Beijing Venture Investment Company at $2.00 per share. The company also entered into an agreement to sell 950,000 additional shares to that investor for the same per share price.

In connection with the technology acquisition, two of the individual sellers (Robert Craig and Song Jin) joined the Board of Directors.

Next Fuel has been conducting extensive testing of our technology in the lab for many years, obtaining favorable results and strategically preparing for our first field test as a final step towards commercialization. To our knowledge, this is the first field test of its kind in the world on virgin coal deposits; and a positive outcome will be a dramatic advancement not only for Next Fuel, but the entire energy industry. PT Enviro Energy owns significant coal assets in Indonesia and realizes the potential for this technology to transform unusable lignite, or ‘dirty coal’, into the cleanest fossil fuel with a growing market demand.

It is estimated that 20-40% of the world’s natural gas is derived from ‘coal bed methane’. Our technology is unique in that we inject environmentally friendly amendments into the coal bed, circulate it utilizing our patent pending process, and accelerate the naturally occurring production of natural gas from the coal. Our implementation team is working very closely on site with PT Enviro Energy team, and we look forward to commencing the first pilot this month.

—Robert Craig, Chairman and CEO