Verona Development Corp. - News Releases - Coal Bed Methane Project In China

	December 05, 2005 Coal Bed Methane Project In China
	Verona Development Corp. ("Verona") is pleased to announce it has entered into a Production Sharing Contract ("PSC") with China United Coalbed Methane Corp. Ltd. ("CUCBM") for the exploitation of coalbed methane resources in the Shilou North Block of Shanxi Province, China. Under the terms of the PSC, Verona must spend US $6.26 million over 5 years with a first year commitment of US$1.51 million including fees in order to earn 60% interest in the project area. Until payback of exploration costs, Verona is entitled to an 88% share of production. The Shilou project covers 1,015 square kilometers and is located along the eastern flank of the Ordos basin. The coal seams occur within gently dipping monocline structure, with minor secondary north- south striking anticlinal and synclinal folding. The coal seams range in depth for outcropping in the east to over 2,000 metres below surface in the western portion of the project area. The coal bearing strata belong to the Upper Carboniferous Taiyuan and Lower Permian Shanxi Formations. The Taiyuan Formation averages approximately 100 metres in thickness and hosts 7 coal seams, including three major seams (#'s 8, 9 and 10). The Shanxi Formation is approximately 65 metres in thickness and is host to 5 coal seams including three main seams (#'s 3, 4, and 5). Previous work on the license includes six test wells, two drilled by Enron in 1995 and four by Arco in 1997. A review of the information collected from these wells indicate that the coal quality is reportedly high with ash contents between 15 and 25%, sulphur contents less than 1% in seams 3-5 and less than 2.5% in seams 8-10. Permeabilities measured to date range up to 4.6 md with mean and median values of 1.323 and 0.305 md respectively. Total coal thicknesses, from the six seams, range from 7.6 metres to 13.5 metres in the test wells with an average gas content of the seams is 17.5. m³/t (618 cuft/t). The Production Sharing Contract was arranged through Troland Resources Inc., the company from which Verona previously acquired the rights to the Letter of Intent for the Zhengzhou Joint Venture Agreement described in Verona's news release issued on October 17, 2005. In consideration for Troland's services and the assignment of its rights to the Zhengzhou Joint Venture, and subject to the successful completion of Verona's due diligence and TSX Venture Exchange acceptance, Verona agreed to issue 2,000,000 shares to Troland upon formalization of the Zhengzhou Joint Venture. Troland has now agreed in principle to split that compensation between the Zhengzhou Joint Venture and the Production Sharing Contract, so that no additional consideration will be payable to Troland for arranging the Production Sharing Contract for Verona. Under the new arrangement, Troland will receive 1,000,000 shares when the Production Sharing Contract is finalized and the other 1,000,000 shares when the Zhengzhou Joint Venture is formalized, in both instances subject to TSX Venture Exchange acceptance. Verona would also like to announce it has appointed Dr. R. Marc Bustin (Ph.D., P. Geo., FRSC) as its technical advisor. Dr. Bustin is a Professor of petroleum and coal geology in the Department of Earth and Ocean Sciences at the University of British Columbia and president of RMB Earth Science Consultants and a principal of CBM Solutions Ltd. He has broad experience in the realm of fossil fuels both in research and in his consultancy practice. Dr. Bustin has over 30 years experience in the petroleum sector including employment by Mobil Oil Canada and Gulf Canada Resources prior to joining the Universtity of British Columbia. He has published over 150 scientific articles on fossil fuels in his time as editor of several well known geological journal publications. Dr. Bustin has been the recipient of the Thiesson Medal from the International Committee for Coal Petrography in 2002 for his contributions to coal sciences/organic petrology and the Sproule Award in 2003 for contributions to the study of unconventional gas resources. Dr. Bustin is an elected Fellow of the Royal Society of Canada. Dr. Bustin is president of RMB Earth Science Consultants (a company specializing in evaluation of unconventional gas resources) and a principal and technical advisor to CBM Solutions Ltd. (one of largest service and technical support companies in the coalbed methane and gas shale industry). "Verona is very fortunate to have Dr. Bustin join our advisory board and looks forward to the knowledge and experience he will bring to our team" stated Juraj Adamec, president of Verona Development Corp. Verona has also entered into a consulting agreement with RMB Earth Science Consultants Ltd, to provide geological consulting services (the "Services") in connection with the assessment of coalbed methane ("CBM") projects in the People's Republic of China. About CUCBM Established in 1996, CUCBM was granted the exclusive right to explore, develop and produce Coalbed Methane in cooperation with foreign enterprises and has the exclusive authority to enter into contracts as authorized by the State Council of the People's Republic of China. CUCBM has PetroChina Company Limited and China Coal Energy Group Corporation as its shareholders. These agreements are subject to the approval of the TSX Venture Exchange. Dr. Marc Bustin (Ph.D., P. Geol., FRSC), a Qualified Person, has reviewed this news release. On behalf of: Verona Development Corp. Juraj Adamec, President For further information, please contact Verona Development Corp. at 604-688-2008. The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. This news release may contain forward-looking statements. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements.

	You can view the Next News Releases item: Tue Jan 3, 2006, Expert Advisors You can view the Previous News Releases item: Fri Oct 28, 2005, Private Placement Announcement You can return to the main News Releases page, or press the Back button on your browser.