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Vol. 12, No. 46 Week of November 18, 2007
Providing coverage of Alaska and northern Canada's oil and gas industry

THE EXPLORERS 2007: Mat-Su CBM gets second chance

Fowler Oil & Gas gets unanimous approval from Matanuska-Susitna Borough to drill coalbed methane well; first okayed under tough new ordinance

Kay Cashman

Petroleum News

When Fowler Oil & Gas Corp. first came on the scene in May 2007, it had been four years since an attempt to develop coalbed methane resources in Alaska’s Matanuska-Susitna Borough collapsed amid an acrimonious argument involving the would-be developer, local residents, the borough and State of Alaska.

Fowler Oil & Gas CEO and Chairman of the Board Bob Fowler, a graduate of Palmer High School and longtime Alaskan, believes that his company has the answer to developing coalbed methane without raising concerns about land access and possible pollution that plagued the previous effort. That effort was made by Evergreen Resources, which has since been bought out by Pioneer Natural Resources, which relinquished Evergreen’s Mat-Su coalbed acreage.

Bob Fowler told Petroleum News that he fully understands the concerns of the residents of the Matanuska and Susitna valleys.

“Our family has been in the Valley for over 50 years and so I’m very familiar with the issues up in the Valley and how people would like to see economic development but also coupled with environmental protection,” Fowler said.

A publicly traded company, Fowler Oil & Gas was founded in 2005 to pursue oil and gas opportunities in Alaska. Sister company, Native American Energy Group, is engaged in the development of oil and other minerals in Montana.

Fowler Oil & Gas shares technical staff, including geologists and operations managers, with Native American Energy.

On private land

Bob Fowler said his company was pursuing several coalbed methane sites in Southcentral Alaska, all on private land.

“We’re working with private landowners who own their own mineral rights,” Fowler said in May 2007. (Part of the 2001 to early 2003 controversy stemmed from required access to privately owned surface land to drill into state-owned subsurface.)

The first of these sites, the Kircher block, received unanimous approval Oct. 1, 2007, from the Matanuska-Susitna Borough Planning Commission for a conditional use permit to drill a coalbed methane well on the acreage, which sits on 749 acres of forest and farmland at the corner of Bogard Road and Trunk Road between Wasilla and Palmer. It was the first coalbed methane well approved under a tough ordinance passed by the borough in 2004 after Evergreen’s unsuccessful attempt from 2001 to 2003 to get coalbed methane production established in the Southcentral Alaska valleys.

Praise from borough

The acting chief planner for the Mat-Su Borough, Eileen Probasco, said Fowler Oil & Gas’ success with the borough was due to Bob Fowler’s preparation before filing for the first permit.

Bob Fowler “really did his homework. … He took the time to figure out what was needed to be in compliance with the new ordinance,” Probasco told Petroleum News Oct. 2, 2007.

Sixteen people testified at the planning commission meeting in Wasilla Oct. 1, she said. “Twelve in favor and four opposed. There were four commissioners acting on the request, all voted in favor” of the permit, which she said was issued in the form of a resolution with 18 findings to develop a coalbed methane operation from a well located in the southwest corner of Section 26, Township 17 North, Range 1 East.

Nine conditions were attached to the commission’s approval, none of which were a surprise to Fowler, including a $50,000 bond to cover abandonment, site reclamation and capping.

The findings also said the fortified steel, 10 by 20 by 10 foot, production equipment and security building had to be built to look like a “Colony barn,” painted to blend in with the landscape, and could have no exterior lighting.

Drilling in spring 2008

Following the planning commission’s decision, Fowler Oil & Gas President Arlen Ehm said that the well would be drilled in the spring of 2008.

“I didn’t want to go out there and rig up, spud in the coldest and darkest months of the year,” Ehm said. “You pay at least 150 percent when you try to push something through in the middle of the winter.”

But the company does plan to move equipment into a barn at the site during the winter of 2007-08, in order to avoid having to truck in heavy equipment during spring breakup, when road load limits are reduced, Ehm said.

Horizontal drilling key

A key element in Fowler’s approach to coalbed methane development is the use of horizontal drilling technology. Anchorage-based M-W Drilling, the drilling contractor for the Kircher project, will drill a single vertical well to a depth of about 3,500 feet, Ehm said. Perforated horizontal wells sidetracked from that central well will then thread out through each coal seam penetrated by the vertical well.

The horizontal drilling technique will enable access to thousands of horizontal feet of coal seam from a single surface wellhead, thus eliminating the need for the profusion of surface wellheads that has blighted some coalbed methane developments, while enabling adequate production rates from a single well, Ehm said.

“We’re draining a lot of acres off of one well bore,” Fowler said.

Not only that. The specially designed coalbed methane drill rig has a mast that’s only 60 feet high, but a capability of drilling laterally, Fowler said.

And once a coalbed methane site goes into production, the wellhead production facilities will be hidden inside a single 20-foot barn-like enclosure.

“They won’t even see that it’s a well,” Fowler said. “… We’re in and out on the drilling in about one month.”

No surface water

The technology used will eliminate the water disposal problems that have often plagued coalbed methane production in the past, Fowler said. The technology uses the bottom part of the vertical well, below the level of the coal seams, to dispose of the water into relatively deep sandstone formations. Thus, no produced water will reach the surface or enter the water table.

“We have a downhole separator which separates the gas from the water,” Fowler said. “The gas flows up (the well). The water flows down into some special pumps that pump it into lower sandstone formations below the coal.”

Downhole monitoring equipment will ensure that the disposed water meets state standards, Fowler said.

To prevent contamination of any water wells in the region around the production site, no coal beds less than 1,000 feet below the surface will be tapped. That will ensure that all production occurs below the depth of the water table, Fowler said. And sealed well casing, cemented to prevent water migration around the pipe, will also protect the water table.

EPA has approved

Fowler said that the U.S. Environmental Protection Agency has approved the technology for downhole separation of gas and water and that the technique has already been permitted in Texas and Kansas.

But what are the chances of finding economic quantities of coalbed methane in the Kircher unit?

“The Cook Inlet basin is a river of coal that comes all the way down from Talkeetna and up around Chickaloon, all the way down to Homer, onshore and offshore,” Fowler said. The coal is very thick, cumulatively, and the seams are abundant and continuous throughout the area; and the coal contains large quantities of gas, he said.

Fowler Oil & Gas plans to deliver gas to the Enstar transmission pipeline at a low pressure, thus eliminating any possible compressor noise, Ehm said.

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