Current Status of CBM in Western Canada Dave Russum, P.Geol. AJM Petroleum Consultants Canadian Institute – Coalbed Methane Symposium June 2005
Canada’s Natural Gas Production (Bcf/d Adapted from CAPP Data) 20.0
?
18.0 16.0 14.0
E Canada Rest WCSB Alberta
Record Prices Record Activity
10.0 8.0
Production Growth controlled by pipeline capacity
Production flat to declining
6.0 4.0 2.0 0.0
19 47 19 50 19 53 19 56 19 59 19 62 19 65 19 68 19 71 19 74 19 77 19 80 19 83 19 86 19 89 19 92 19 95 19 98 20 0 20 1 04 E
Bcf/d
12.0
Not Sustainable
Resource Triangle Conventional Reservoirs
Obvious Traps
Small Resource High Quality Difficult to find Easy to develop Low cost High margin
Subtle Traps Heavy Sour Oil Gas
W.C.S.B. Tar Sands
Unconventional Reservoirs
Oil Shale
Tight CBM Gas Shale Gas Gas Hydrates
Basin Maturity Better Technology (Higher prices) Large Resource Low Quality Easy to find Difficult to develop High cost Low margin
Canada’s Resources and Reserves Natural Gas (Conventional data adapted from CGPC 2001)
?1000’sTcf Ultimate Resources
Total Conventional + Unconventional
592Tcf
?>1,000Tcf
Discovered
340Tcf Raw Gas Sales Gas
204Tcf Remaining Reserves
Unproduced
58 Tcf (>95% WCSB)
Rate of Conversion: Accessibility Technology Price Motivation
Understanding Remaining Gas Resources – Accessible and Economically Available
Accessible
Accessible with restrictions
Inaccessible
Available at current prices
Presently Available Resources
Future Available Resources
Unavailable Resources
Available at higher prices
Future Available Resources
Future Available Resources
Unavailable Resources
Can apply this approach to Conventional and Unconventional Resources Russum, CSEG Recorder, June 2003
Unconventional Gas Reservoirs • Any methane not trapped in a porous, permeable, buoyancy driven system • ‘More Challenging to extract’ • Characteristics – extremely variable • (Often) – – – – –
Methane not freely dispersed Source rock and reservoir closely related Large, low concentration resources Unusual pressure regimes Low or heterogeneous permeability
Unconventional Gas - Producibility • • • • •
Low productivity, often low decline rates Low recovery factors Require greater drilling density Environmental issues Technologically challenging to produce: – Area and resource specific solutions – Low risk once specific solutions identified
• Relatively high development and operating costs
Unconventional Gas - Types • Shallow Biogenic Gas • ‘Tight’ Gas – includes Deep Basin and Basin Centred Gas (BCG)
• Coalbed Methane (CBM) – Also called Natural Gas from Coal (NGC)
• • • •
Shale Gas Gas Hydrates – in molecular structure of ice Inorganic Methane Continuous generated Methane
Unconventional Gas – Status and Resources (*From various sources) Status USA
Resource in Canada*
Status Canada
Shallow Biogenic Gas
On-going Production
30Tcf
Production since 1905
Tight Gas
Growth Opportunity
600Tcf
Production since 1976
Coalbed Methane
On-going Production
400Tcf
Production since 2002
Shale Gas
On-going Production
100Tcf
Experimental activity
Gas Hydrates
Experimental Research
5,000Tcf
Experimental Research
Inorganic Methane
?Theoretical
?
?Theoretical
Continuously Generated Methane
Pilot Projects
400Mmcf/d
Pilot Projects
Contribution of Unconventional Gas Production, WCSB, December 2004
Shallow
CBM
Deep/Tight Conventional Shale
Unconventional : 33% Source: PetroCube 2005
WCSB Coalbed Methane Resource Potential
Status
Ardley Coal WC Alberta
Low/Moderate
Limited activity, Best potential is relatively remote
Horseshoe Canyon Coal
High
Focus of current activity, readily accessible, dry gas
Mannville Coal WC Alberta
Very High
Experimental activity, requires dewatering eg. Trident, Corbett Creek.
Mannville Coal NE BC
Moderate?
Experimental activity, - 7 permits granted, confidential results
Kootenay Coal SE BC
Moderate
Experimental , Encana, Devon. Coal continuity and environmental problems
Mannville CBM
Mannville CBM – Current Status • • • • •
Still experimental ‘Conventional’ CBM requiring dewatering Not yet producing at economic rates Need to find ‘sweet spots’ – better permeability Main area of interest T60-66, R1-11W5 – Starting to see experimentation over a wider area
• Main Operators – – – – –
Trident - Corbett Ck Apache Thunder Energy Centrica PennWest
Mannville CBM Production AJM Database wells producing Mar 2005 Mannville CBM Production (to March 2005)
12000
6000
10000
5000
8000
4000
6000
3000
4000
2000
2000
1000 0
20 01 -1 20 2 02 -0 20 3 02 -0 20 6 02 20 0 9 02 -1 20 2 03 -0 20 3 03 -0 20 6 03 -0 20 9 03 -1 20 2 04 20 0 3 04 -0 20 6 04 -0 20 9 04 -1 20 2 05 -0 3
0
Water Bbls/d
Gas Mcf/d
(Source AJM Database)
CBM producing well count: 56, Water 2000 bbls/Mmcf
Horseshoe Canyon CBM
Horseshoe Canyon Coals
•Apache
•MGV •Fairborne •Thunder
•Trident •EOG
•1st NGC Sales
•MGV •Encana
•MGV
•Median depth ranges from 300m to 600m • drill and complete 3 wells per day •10 to 20 seams of 1-2m thickness Stimulated by Nitrogen gas fracture treatment •3 to 4 week flow testing •No water production – dry gas •Range 20 to 500 Mcf/d •Well head pressure < 5psi •Compression facilities required •Four wells per section •1 to 4 BCF/section in place
AJM’s CBM Database • Focused currently on Horseshoe Canyon • Reviewed all wells in CBM Fairway • Excludes confidential wells as of 31st March 2005 (underestimates total wells but gives better confidence in data) • Assignments are independent of Board data • Producing wells split into: – Pure coalbed methane wells – Wells with commingled perforation and production from coal and adjacent sands – Wells where there is a contribution from CBM but information is incomplete – Confidential wells licensed as CBM
2005/02
2004/12
2004/10
2004/08
2004/06
2004/04
2004/02
2003/12
2003/10
2003/08
2003/06
2003/04
2003/02
2002/12
2002/10
2002/08
2002/06
2002/04
2002/02
2001/12
2001/08
CBM Well Count
Horseshoe Canyon
All CBM â&#x20AC;&#x201C; Producing Well Count To Mar 2005 excluding Confidential Wells All HSC CBM Producing Wells
1800
1600
1400
1200
1000
800
600
400
200
0
AJM, 2005
Horseshoe Canyon CBM Producing well count (AJM Database, Mar 31 2005)
Horseshoe Canyon Producing Well Count Wells producing Pure CBM
951
Wells producing from Coal + Sand without differentiation of production
547
Wells producing from coal but insufficient data to define whether production also from adjacent sand
183
Confidential wells probably producing from coal
384
TOTAL
2065*
* Compares to 1470 wells identified by AEUB as CBM wells
Horseshoe Canyon Production Horseshoe Canyon Production to Mar 2005 (AJM Data) 200
160
Conf 'CBM' wells
140
CBM Undefined
120
CBM + Sand
100
CBM - Pure
80 60 40 20
2005-03
2004-12
2004-09
2004-06
2004-03
2003-12
2003-09
2003-06
2003-03
2002-12
2002-09
2002-06
2002-03
0
2001-12
Mmcf/d
180
Horseshoe Canyon CBM Production 160
1600
140
1400
120
1200
100
1000
80
800
60
600
40
400
20
200
2005-03
2004-12
2004-09
2004-06
2004-03
2003-12
2003-09
2003-06
2003-03
2002-12
2002-09
2002-06
2002-03
0
2001-12
0
Water Bbls/d
Gas Mmcf/d
Horseshoe Canyon Gross Production (AJM Data)
CBM producing well count: 1675, Water <1bbl/Mmcf
Horseshoe Canyon Production - Observations • Considerable variation in production profiles • Varies between wells, between areas and between operators • Relative productivity greatly influenced by line pressure – Need very low line pressure – Noise from compression is major environmental challenge
• Early phase of development limits accurate prediction of ultimate productivity • Developing tools to better understand and predict results
Horseshoe Canyon Current Productivity Avg Daily Production vs Production Days 600
Gas Production (mcf/d)
500
400
Trendline
300
200
100
0 0
100
200
300
400
500
Days on Production
600
700
800
Horseshoe Canyon Productivity Statistics (mcf/d) to March 2005 Pmean Daily Production
P10
P50
P90
CBM Pure
100
186
81
32
CBM + Sand
104
202
80
44
CBM Unconfirmed
100
172
81
35
HSC CBM wells data to March 2005 - 5 or more wells on production (Source: AJM Database) All CBM Producing Wells - with Data to March 2005 700 600
400
300 200 100
EO G M us ta ng Re so lu te En er m ar k Ba yt ex G la ci er Ce nt ric a De vo n
Fa ent irb or ne Th un de r CN RL
Tr id
ch e
G V
Ap a
M
ca na
0
En
CBM Well Count
500
+ 26 Operators with <5 wells on Production
na
A
M G pa V c Tr he Fa ide irb nt o Th rn un e de C r NR L EO M us G R tan es g E n ol u er t e m a B rk ay t G ex la C cie en r tr ic D a ev on
En ca
# of Producing Wells
700
600 Average Daily Production
400 150
300 100
100
0 0
Avg mcf/d per well
Average HSC Productivity for main CBM Producers 250
Producing Wells
200
500
200 50
AVG all wells all producers
Horseshoe Canyon CBM – How significant? • Fairway with >4m net aggregate coal covers approximately 12,000 sq miles • 4 wells per sq mile = 48,000 well • If 24,000 wells on production at one time @ 100mcf/d = 2.4Bcf/d • 48,000 wells @ 300mcf = approx. 15Tcf of Marketable gas
In Conclusion: • Typical Horseshoe Canyon CBM well produces 100mcf per day • Considerable variations in the productivity by area and Company • AJM will continue to gather data on CBM as it evolves in Canada to identify trends, productivity and ultimately reserves per well
More Information? Dave Russum, drussum@ajma.net CBM Studies at AJM: Larry Boyd, lboyd@ajma.net AJM Petroleum Consultants, Petrocube and Well Load: Hugh Mosher hmosher@ajma.net www.ajma.net or www.petrocube.com AJM Petroleum Consultants: (403) 232-6600
Closing Comments Question Period
Question One
Question Two
Question Three