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Evergreen Resources could be drilling coalbed gas wells in 2001 Company has applied for shallow gas leases in Matanuska-Susitna area, hopes for decisions from Division of Oil and Gas by end of year Kristen Nelson PNA News Editor
Evergreen Resources Inc. of Evergreen, Colo., has a very focused approach to coalbed methane development and has become a technology leader, Mark Sexton, president and CEO of Evergreen Resources, told the Alaska Support Industry Alliance Aug. 4.
The company operates coalbed methane prospects in Colorado, is prospecting in England and hopes to be drilling in Alaska next year.
“It was not our intention to turn Evergreen entirely into a coalbed methane company,” Sexton said, “but those seemed to be the best opportunities available to us and so we have focused on coalbed methane and become a technology leader, largely because of our completely integrated approach to it.
“We were just trying to prove that we could make coalbed methane work when we got into this in the early ‘90s,” Sexton said. “And it works so well that because of our almost exclusive focus on coal methane, in the last few years Evergreen has emerged as an independent energy company leader in several important benchmarks, finding and development costs, reserve replacement efficiencies, drilling…”
“Not only do we operate the wells, but we also drill the wells, frac the wells, cement the wells ourselves.” Sexton said that doing its own drilling, fracturing and cementing has given the company quality control “and it’s been an important ingredient, we think, to our success with the program.” Main project in Raton Basin “Our main drilling project is in the coalbed methane play in the Raton Basin of Colorado. Our primary unevaluated project is in the U.K. And we would like to add another project to that and that’s here in Alaska.”
Sexton said the company has drilled more than 300 wells in the Raton Basin, consolidated a couple of hundred thousand acres in the basin and expanded the gas infrastructure, putting in several hundred miles of gathering system. Evergreen also got the local gas transmission company, Colorado Intrastate Gas, to upgrade its transmission lines.
The company accelerated its drilling program slowly, he said, starting with four wells, then seven, then 15. Last year Evergreen drilled 85 wells in the Raton Basin, Sexton said, and plans to drill 100 wells this year and to continue at that rate for the foreseeable future. Bid on Alaska shallow gas leases Evergreen Resources was one of the companies that bid on shallow gas leases in the first Alaska offering in February. The state received 262 applications from 36 applicants. The state’s shallow gas leasing program was authorized by the Legislature in 1996; regulations were approved in 1998.
The Division of Oil and Gas drew numbers from a hat Feb. 29 to rank applicants, all of whose applications were deemed to have been received simultaneously if received by 8:30 a.m. that day. Where applicants have applied for the same areas, leases will be determined by the applicant’s rank in the drawing.
Sexton said Evergreen Resources officials met with the Division of Oil and Gas about the shallow gas lease applications and said the division expected to make its decisions between September and December.
“Alaska has a lot of opportunities for coalbed methane development,” Sexton said. Company drilling in the United Kingdom This year, Sexton said, Evergreen sent its own rig and crew and fracturing equipment to the United Kingdom, where the company has leases on half a million acres. The company’s focus is south of Liverpool in the Cheshire basin, where it has consolidated a couple of hundred thousand acres. The company has started drilling and has fractured three wells, trying to get them to de-water.
The company is looking at three different gas concepts in the United Kingdom: conventional coalbed well drilling with a pattern of wells; drilling in rubble left after coal mining where “the mine itself has de-stressed the coals and has created a zone that is naturally de-stressed and de-sorbed partially.”
The third thing the company is going to try is drilling into the mined out areas. “A lot of these mines have been sealed for 10 years or more. They’ve been slowly filling up with methane that continues to desorb into the mine area,” Sexton said.
“Power generation is an option for us in the U.K. I think it’s an option here, too, although developing the market mandates that we go slowly and work on that, but you can containerize a 1 megawatt power plant and put it actually in the middle of a residential area and people can’t hear them if they’re properly contained,” Sexton said. Coals in Alaska young All coalbed basins are different, Sexton said, and not enough coalbed drilling has been done in Alaska for there to be much information. One thing that is know, he said, is that the coals in Alaska are a little young — “I guess if we wait 10 million years and come back it would be ideal.” On the other hand, “Alaska appears to be one of the few places where the coals are over pressured and it’s come to everyone’s attention that over-pressured coals largely coincide with the sweet spot in the San Juan basin,” Sexton said.
To do a coalbed methane project right you need economies of scale, but you don’t know where a successful program will be possible and so need to start several small pilot projects and work out from there.
Once shallow gas leases are awarded, Evergreen’s goal will be to put a unit together. “And we could be drilling wells, if we’re successful in the process, we could be drilling wells as early as next summer,” Sexton said. “A couple of groups — say, three wells here, three wells there, see how it goes. Make sure that we get the work done and evaluated and start getting after it.”
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