Out on the dusty southwest Texas plains where
cattle outnumber people and the Rio Grande meanders through on its
way to the Gulf of Mexico, scientists are working feverishly to
determine if that desolate land might develop into the next hot
coalbed methane play.
That's right. Coalbed methane.
Coalbed methane is the fastest growing segment of
the overall natural gas resource base in the United States. But
until recently conventional wisdom held that the lignite coals of
the Gulf Coast were not prospective due to low rank and insufficient
A pilot project in the Olmos coals in the Maverick
Basin, however, hopes to prove that conventional wisdom false, and
for the first time produce commercial quantities of coalbed methane
on the Gulf Coast.
And the project was virtually an accident.
The Exploration Co. (TXCO), based in San Antonio,
had been following the progress of coalbed methane production in
the United States, trying to determine if some of its properties
in North Dakota might be prospective for coalbed methane. It never
occurred to the firm that its rapidly expanding acreage position
in the Maverick Basin could hold coalbed methane.
TXCO's chief financial officer has contacts in Mexico,
however, and a couple of years ago a retired exploration manager
for PEMEX, the Mexican national oil company, was in the company's
San Antonio office discussing operations on both sides of the border.
During those talks the official mentioned that the PEMEX oil and
gas division was required to drill wells to vent natural gas prior
to northern Mexico coal mining operations by the firm's mine division.
"That triggered our interest," said James E. Sigmon,
president of TXCO. "We began thinking about what might be on this
side of the river."
Tentative First Steps
TXCO began investigating the area and found that
there was a coal mine near Eagle Pass, Texas, active up until World
"The literature of that time described the coals
as bituminous, which was unusual since most of the coals in Texas
that we were aware of were Wilcox lignite coals," Sigmon said.
Further investigation uncovered that a second mine
had operated north of Laredo, containing a different kind of coal
that was much harder and closer to anthracite -- but this historical
information seemed to indicate that high-grade coals did exist in
"However, all this literature dated from the early
1900s, and we weren't comfortable with the validity of that information,"
Sigmon said, "so we decided to take sample cuttings of the Olmos
coal zone in a well we were drilling to test deeper oil and gas
"Ordinarily the coal zone would be behind surface
pipe and we wouldn't even log it," he added, "but we got a significant
amount of cuttings from the coals."
TXCO had those cuttings typed, which proved the coals
were indeed bituminous B coals.
"The next step was to run adsorption tests on the
cuttings to determine just how much gas the coals could hold and
if they were saturated with gas," Sigmon said. "We got positive
results from those tests as well."
TXCO next drilled three shallow core tests that ranged
from 200 to 600 feet deep, and ran desorption tests on the cores
to get some idea of the gas quantities contained in the coals. The
results were encouraging.
"That was two years ago," Sigmon said, "and since
that time we have been quietly amassing more acreage in the Maverick
Basin specifically to target potential coalbed methane targets.
Today we have about 250,000 acres in the basin that are prospective
for coalbed methane, and we have drilled 10 additional wells to
run more desorption analyses."
TXCO also set pipe on some of those wells to run
permeability tests on the coals, which were encouraging.
"You can have coal and gas in the coal, but if you
don't have fractures and permeability in the coals it's difficult
to get the gas out," Sigmon said.
The firm has established four pilot programs totaling
about 30 wells to assess the dewatering phase of the Olmos coals
and the ultimate economics of a coalbed methane play. TXCO bought
over 100 old wells and re-entered some of those to establish the
pilot projects. The company also drilled five new wells as part
of the pilots.
"Having run adsorption tests, we knew the coal was
undersaturated, which means it doesn't hold as much gas as it could,"
Sigmon said. "We have to reduce the pressure down to the saturation
point before the gas will come out of solution.
"We've installed a monitor well at one of the pilots
to monitor the bottom hole pressure so we can continually assess
Other Sites of Potential
The Olmos in the Maverick Basin isn't the only coal
zone in Texas garnering some attention -- Ravenridge Resources and
Union Pacific Resources studied the Wilcox north of Houston and
had some encouraging results. Anadarko Petroleum subsequently acquired
Bob Downey, owner of the Energy Ingenuity Corp. in
Colorado who has assisted the USGS and the Texas operators, said
the Wilcox coals have as much if not more potential than the Olmos,
but virtually no wells have been drilled to test the coals, so there
is just not enough data available to make a determination.
"The status of that Wilcox play is akin to the first
couple of wells in the San Juan Basin," he said. "Every time you
think you have a handle on the mechanisms that control coalbed methane
and where the most prospective areas are, something will pop up
and prove you wrong."
The Powder River Basin provides a classic example.
"Companies walked away from the coals there in the
1970s and '80s because they were too thick, the permeability was
too high and gas content was too low," Downey said. "They were sure
only an ocean's worth of water would be produced out of the coals.
Today we know just how wrong they were."
Downey believes that if companies can prove up coalbed
methane potential on the Gulf Coast, it would be a "real boon for
the country and those firms." Unlike the Rockies, there is a massive
infrastructure in place, gas prices are better, the weather is more
temperate and it's not on federal lands.
"Those are a lot of operational and economic positives,"
Sigmon realizes the daunting task still facing his
"We've heard all the stories about other coalbed
methane plays," he said. "All the experts tell us that every play
is different, and what works for one is not the optimum approach
for another -- (so) we are experimenting at our pilots to see what
"We know that in other coalbed methane plays the
original operators were not the ones who made it economic -- they
walked away too soon," he said. "We don't intend to repeat that
mistake, so we view this as a long-term project and plan to find
the right solutions for this particular play."
Sigmon fits the situation into a neat package:
"Do we have coal? Yes. Is it the right kind of coal?
Yes. Does the coal contain significant quantities of gas? Yes. Do
we have permeability? Yes. Can we commercially produce the coalbed
methane? We still don't know.
"Obviously we are encouraged since we have acquired
an additional 250,000 acres to chase this play."
Barker is excited by the potential, too:
"If this works here in the Maverick Basin, the bituminous
coals found at depth throughout the Gulf could hold huge potential,"
he said. "We're talking about large quantities of gas in an existing