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Evergreen expands north, west of Pioneer Coalbed methane producer acquiring acreage on north side of Castle Mountain fault; applies for shallow gas leases Kay Cashman Petroleum News Publisher & Managing Editor
Evergreen Resources, operator of the Pioneer unit in the Matanuska-Susitna Borough north of Anchorage, is in the process of picking up what it considers more prospective acreage for coalbed methane production north and west of Pioneer, across the Castle Mountain fault.
In an earnings conference call July 31, Evergreen CEO Mark Sexton said the company wants to get its hands on 100,000 acres north and west of the fault near Chickaloon and south of the Sheep Mountain area, and then expand to a total of 200,000 acres.
“That’s about right for a coalbed methane project,” Sexton said. Currently, Evergreen holds 11,200 acres outside the Pioneer unit and 52,813 in the unit: “This does not include shallow natural gas leases acquired (and being acquired) via farm out. The total of those properties is not yet determined,” Evergreen spokesman Jack Ekstrom told Petroleum News at the end of July.
If Evergreen decides to proceed with gas development at the Pioneer unit, it will be Alaska’s first commercial coalbed methane operation. Applies for 11 shallow gas leases In addition to trying to put together deals with private landowners in the area, Evergreen has applied to the Alaska Department of Natural Resources, Division of Oil and Gas, for 11 shallow gas leases (ADLs 390396-390406) north of the Castle Mountain fault. On July 25, the state issued a call for public comments, due by Sept. 25. If approved, Evergreen will receive leases for state-owned natural gas from any part of a field that is above 3,000 feet true vertical depth for an initial term of three years.
Ekstrom said the company will likely ask the state to expand the Pioneer unit to include the acreage it is acquiring across the fault and outside the unit.
The coals north of the fault look to be easier to produce, Ekstrom said.
“The coals under 3,000 feet in our first pilots (in the Pioneer unit) are up significantly higher on the other side of the fault; and drilling there is a lot easier because there is not as much glacier silt and gravel to drill through,” he said.
“The process for coalbed methane is it’s easy to find and hard to produce, unlike conventional oil and gas operations. … It takes an extraordinary amount of testing time to unlock all the doors that lead to commercial success,” Ekstrom said.
The third pilot Evergreen recently said it was drilling is on the north side of the Castle Mountain fault. (See July 6 issue of Petroleum News.)
“We always thought the coals on that side were more prospective. … Given the opportunity to explore in that area we have taken it,” Ekstrom said.
Some of the private leaseholders north of the Pioneer unit, across the fault, include Kenneth Schlenker, Ted Williams and Paula J. Mills.
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