Powder River Basin Coalbed Methane Wells - Reserves and Rates

Abstract

Abstract Coalbed methane has become a significant source of U.S. natural gas production, contributing 9% of the country's supply and 10% of its proved reserves. The most active coalbed methane area is the Powder River basin of eastern Wyoming, with more than 20,000 wells completed in the last 10 years with annual additions of greater than 2,000 wells. This study analyzed the projected ultimate recovery, flow rates and dewatering time of 6,600 wells producing from the Wyodak and Big George coal zones - the source of 58% of the basin's cumulative production, 61% of the current production and 45% of the CBM wells. For the Big George and Wyodak wells, the estimated ultimate recovery (EUR) averages 223 million cubic feet (MMcf) per well (median 168 MMcf). An average peak gas rate of 319 thousand cubic feet per day (Mcf/D) (median 236 Mcf/D) occurred an average of 1.2 years after the well was placed on production. The average well declined at a rate of 45% per year after entering the decline phase with very little hyperbolic behavior (average b = .09). Distributions of EUR and peak rates were strongly log-normal. The EUR and peak gas rates both show a slight overall deterioration over time, although the "spread" is larger with more high rate wells in later years. But the time to reach peak gas rate is shortening as more areas are dewatered. There seems to be only a slight correlation between total depth and EUR and little correlation between gross perforated interval and estimated ultimate recovery or peak rate, although the perforated interval information is very incomplete. Development of Powder River basin coalbed methane has an average finding cost of $.71/Mcf, and the mean well has a return-on-investment of 4.70:1 and a net present value index of 3.74, assuming a base gas price of $6.50/Mcf minus $1.50/Mcf for market differential and transportation. Introduction As conventional oil and gas resources become more difficult and expensive to pursue, the world will increasingly utilize coalbed methane (CBM) as an energy source. Proven oil reserves in 2005 for the world were 1,088 billion barrels 1 compared to resource estimates for coalbed methane that range up to 1,400 billion barrels equivalent. Although much of the coalbed methane will remain uneconomic to recover, it still represents a resource that will contribute to future energy production. Coalbed methane has grown to become an important source of natural gas in the United States, and now contributes approximately 9% of the country's production and 10% of U.S. proved reserves. Production increased from only 196 billion cubic feet (Bcf) in 1990 to more than 1,720 Bcf annually in 2004 2. The State of Wyoming in the western U.S. was the source of 341 Bcf of production from coalbed methane reservoirs in 2005 (2% of total U.S. natural gas), and a single basin, the Powder River (PRB), contributed 99% of that. CBM production began in the State in 1989 and increased rapidly after 1999. By early 2006, there were nearly 20,500 completed CBM wells in the Powder River basin, producing a total average of 920,000 thousand cubic feet per day (Mcf/D). Cumulative CBM production in the basin is approaching 2 trillion cubic feet (Tcf) and the resource estimates range up to 39 trillion cubic feet 3. Methodology Many of the coal zones divide into thinner members in portions of the basin, and the naming conventions make separating the coal zones difficult. The State does, however, classify all wells into individual reservoir names, such as Anderson, Big George, Dietz, Canyon, Cook, Wall, and Wyodak. The majority of wells (88%) are assigned a single coal reservoir name, but there are some combinations of multiple coal names, for example, WALL-CANYON, or, COOK-WALL-PAWNEE, likely the result of completions in multiple coals.