Given the revved-up drilling activity targeting tight gas deposits, oil shales, coal bed methane (CBM) and the like, unconventional hydrocarbons are increasingly becoming conventional.
In some instances, it’s the locale that may be considered unconventional.
Consider coalbed methane drilling for example.
One day in the not-too-distant future, Louisiana may join the ranks of such noted CBM producing regions as the San Juan Basin and the Powder River Basin.
Indeed, there are a lot of believers -- oil and gas folks and others -- who think Louisiana may soon be a source of significant coalbed methane production.
But watch your language; those in the know call it coal seam natural gas (CSNG).
“For a lot of people, methane has a bad connotation,” said Diana Chance, manager of Donner properties and a recognized longtime promoter of CSNG drilling in Louisiana. “In Louisiana, we’re calling it coal seam natural gas, because that gas truly is like the gas that comes out of the other Wilcox wells in North Louisiana.”
Coal has been mined at the surface since 1985 in central northwestern Louisiana in DeSoto Parish where the Wilcox Group (Paleocene-Eocene) crops out, according to Clayton Breland Jr., assistant research professor at the Louisiana Geology Survey Basin Energy Research Section (formerly the Basin Research Institute). He noted the coals are generally confined to the lower Tertiary Wilcox Group.
Coal beds in North and Central Louisiana are widespread, extending from Toledo Bend westward to the Mississippi River, according to Jim Welsh, Louisiana Commissioner of Conservation. Breland noted they comprise a portion of the Gulf Coast Tertiary Coalbed Methane Basin, which covers parts of seven southeastern states.
The first CSNG production in Louisiana occurred in 1989 in Caldwell Parish in a well that was plugged and abandoned the same year.
Interest in the potential to economically recover gas from the coal began heating up in the late 1990s, ultimately kick-starting some drilling activity, according to Chance. She noted that Devon, King Drilling and the late John Echols -- a noted Wilcox authority at the former LSU Basin Research Institute -- all drilled wells in 2002 to test the commercial potential of the CSNG.
Interest and activity in the coal escalated to the point that Mark V Petroleum spearheaded an effort to establish the first production units for CSNG in Louisiana. Fifteen thousand acres have been unitized in the form of three units of approximately 5,000 acres each in Caldwell Parish.
“In this part of the Wilcox from 1,850 to 3,200 feet, there are three coal seams,” Welsh said, “and the area has been unitized as a whole zone.
“The lower zone is called the Reynolds coal seam, which is bituminous and about 30 feet thick,” Welsh noted. “The seam is encased above and below by shale, which is different from the upper seams with sand above and below.
“We think the encapsulating shale will help in retarding the salt water from moving into the perfs.”
It is noteworthy that the Louisiana coals are comparable in age to the rocks producing coal seam gas in the Powder River Basin in Wyoming.
“The testimony at the (unitization) hearing was positive, comparing the Louisiana area with a known successful area,” Welsh noted. “The number crunching looked pretty good.
“There’s quite a lot of coal seam gas in the Gulf Coast area,” Welsh said. “It’s just a matter of how to produce it.”
When queried as to whether Mark V is in the forefront of the CSNG development in the state after successfully pushing for unitization, company president Frank Spooner replied wryly: “We’re spending money.”
In fact, Mark V has three wells on production and set pipe on a fourth hole in mid-March.
All wells are in the Reynolds coal, which Spooner noted has two to three times the gas content of the Powder River Basin coal. The wells range between 2,400 and 3,000 feet deep and cost $300,000 to drill, complete and frac.
“The future looks good if the wells perform decently,” Spooner said. “If we can get them up to 100,000 a day, we’ll have a very economic deal. With coalbed, the longer they produce, the better the production gets.
“To get the gas to come out of the coal, you have to de-water it,” Spooner noted. “The longer you get water off there, the more you lower the bottom hole pressure, and the gas absorbed in the coal starts coming out of the coal when you lower the pressure.”
The lengthy process to reach optimal production explains why the early wells are still considered to be in the testing phase, Chance noted. Even so, they’ve already served a critical role in this emerging potential new play.
“In North Louisiana, the contention was all the coal was lignite, which we were mining,” Chance said. “All thought it was the same coal all across Louisiana, but the early wells tested and proved two significant things”:
- It’s a sub-bituminous, biogenic coal.
- Significant amounts of gas are in the coal.
There’s also plenty of water to deal with, but that’s not tempering the enthusiasm.
“What they’re working on now is how to get that gas out of the ground more effectively and less costly,” Chance said. “The gas is there, and they’re going to make it work.
“Companies have leased or optioned 300,000 to 400,000 acres total,” Chance noted, “and I think we’ll see a huge massive new play here in the near future.”
Given the current struggles of the Bayou State where the budget was battered along with the coastal area by the devastating 2005 hurricanes, a whole new resource play would be very meaningful, providing a badly needed economic boost in a number of ways.
“To develop coal seam natural gas, the spacing is very dense, so this has the potential for thousands of wells,” Welsh said. “This would result in many good paying construction jobs in the northern and central portions of our state.
“If the new energy source is economically viable over the long haul, permanent production facilities will be constructed, resulting in new permanent highly skilled jobs,” Welsh added. “Service companies ... for the oil and gas industry will also thrive, expand and prosper.”