Phillips acquires interest in Wyoming coalbed methane acreage

Petroleum News Alaska

Phillips Petroleum Co. said Sept. 22 that it has acquired a 50 percent working interest in Yates Petroleum Co.’s coalbed methane acreage position in Wyoming’s Powder River basin.

“This acquisition meets our strategy to target gas-producing areas where we can capitalize on our technical strengths in a low-cost commercial development with high growth potential,” said Jim Bowles, vice president of Phillips’ Americas division, exploration and production.

The agreement establishes a joint development partnership between the two companies for 340,000 gross acres and 90 existing coalbed methane wells. Yates will serve as operator for the project. The companies plan to expand activities on joint-owned leases within currently producing coalbed methane formations, as well as prepare to conduct pilot tests to prove additional commercial areas.

The companies could drill as many as 2,000 wells during the next 10-20 years, dependent upon the success of the program.

Phillips has been producing coalbed methane from New Mexico’s San Juan Basin since 1989. The company currently produces approximately 350 million cubic feet a day from more than 230 wells there. In addition, Phillips is actively exploring for coalbed methane in China’s Shanxi Province.