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Coalbed methane drives record gas drilling activity in Canada
Gary Park
Coalbed methane contributes a mere 1 percent of Canada’s gas production, but the resource will push the gas sector to new heights in 2005, based on the latest forecasts by the industry and analysts.
Calgary-based investment dealer Peters & Co. said in a mid-December report that coalbed methane wells will double next year to 3,000, lifting the gas well count to 17,150 from this year’s projected 16,100.
It estimated that 90 coalbed methane projects are already under way involving 37 companies in Alberta and British Columbia, laying the foundation for Canada’s coalbed methane output to climb to 450 million cubic feet per day over the next two years from the current 114 million.
Peters & Co. said Apache Canada, EnCana, MGV Energy and Trident Exploration will lead the coalbed methane charge in 2005, with Apache raising its well total as much as 800 from its current 300 and more than tripling its volumes to 142 million cubic feet per day.
EnCana, with a current tally of 450 wells, will add another 1,000 in 2005, the report predicted, while MGV, the wholly owned unit of Quicksilver Resources, will more than double its well count to 750 in 2005 and make a three-fold gain in production to 100 million cubic feet per day.
Trident, which had targeted 300 gross wells in 2004, will add another 500 to 800 in 2005, pointing to a quantum leap in volumes from its reported 11 million cubic feet per day in September. 1,500 coalbed methane completions expected in 2004 Peters & Co. expects Canada to notch 1,500 coalbed methane well completions this year, achieving year-end production of 150 million cubic feet per day, or 1 percent of Canada’s total gas volumes.
Compared with the United States, coalbed methane is still in its infancy in Canada, but the potential is huge.
The Geological Survey of Canada has estimated coal seams hold 182 trillion to 553 trillion cubic feet, 60 percent located in the Alberta plains.
But Peters & Co. noted that most experts rate the ultimate recoverable resource at 20 tcf to 100 tcf.
For the entire gas sector, the Alberta Energy and Utilities Board issued 13,502 permits for conventional gas wells for the first 11 months of 2004, 17 percent ahead of last year’s pace, while licenses for coalbed methane-targeted wells more than tripled to 1,397. More than 20,000 gas permits expected for 2004 Canada-wide, regulators expect to issue 20,000-plus gas permits this year, having already exceeded 18,000 by the end of November in Alberta, British Columbia and Saskatchewan.
Leading the percentage gains was northeastern British Columbia where licenses were approved for 1,468 gas wells, 264 ahead of the January-November period of 2003.
The license count totaled 25,355 at the end of November, 8.6 percent above the 2003 record, with November alone claiming 3,221 new permits.
Industry records to the end of November show about 14,760 gas wells were completed across Canada, or 73 percent of the total 20,224 of which oil wells accounted for 20.5 percent, with the balance reported as service wells and dry holes.
Based on that performance, the Canadian Association of Oilwell Drilling Contractors expects rig utilization among its member companies will average 62 percent for all of 2004, matching the record set in 2003, although this year has seen the fleet expand by 124 rigs to 702.
Fleet utilization for early November in western and northern Canada was 80 percent.
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