Coal Bed Methane Project

Panoak has focused its attention on coalbed methane (CBM) natural gas development for a good reason. In recent years, coalbed methane has developed into one of the most active gas plays of the United States.  Coalbed methane has become an important part of the natural gas supply of the United States and now represents more than 7 percent of dry gas proved reserves (Energy Association; 2000).  Originally coal gas exploration and development of coalbed methane production in areas such as the San Juan Basin, however, smaller independents like Panoak became involved as information became available and numerous unused wellbores, it was a natural project for Panoak to explore.

Coal gases are generated in Situ during coalification and are stored primarily in micropores on the coals matrix's large internal surface area by sorption.  This sorption process is pressure dependent, and the gas is held in the micropores by the pressure of water in the coal natural fracture network or cleat system.  In order to produce the gas, the water must be pumped off or dewatered to reduce  the reservoir pressure, thereby liberating the gas from the coal matrix, allowing it to flow through the cleat system and into the wellbore. 

Many factors govern the productivity, such as coal distribution, coal rank, gas content, permeability, hydrodynamics, and tectonic/structure setting.  The coals in the Northeastern Oklahoma trend that the, Panoak properties are located contains numerous 1 to 4 foot laterally continuous coals of high thermal maturity, moderate to high permeability.  Productivity and consequently reserves, have increased in newer wells developed in the area.  Additionally, newly drilled wells typically have higher productivity due to better drilling, cementing, stimulating, and completion techniques.

Many of the producing coalbed methane wells in the Cherokee Basin are wells, which have been recompleted from other producing zones.  Historically one of the completion techniques employed in the area to reduce drilling costs, was to circulate cement from the bottom of the well to the surface, many times as much as 1500 to 2000 foot, thereby eliminating the need for setting surface casing to protect the fresh water zones.

A preliminary study of approximately 240 coal wells in N.E. Oklahoma indicates that wells which were recompleted from old oil & gas wells developed reserves of approximately 200 Mcf per well.  Furthermore 30 plus wells drilled  for coal gas use only employing new drilling and completion techniques had reserves of 400-500 Mcf per well.  As newer wells come on line and data is available, additional research will be done to further quantify the effects of the new completion techniques.

In summary, every coal well is different.  It is imperative to document  and monitor each treatment and step in the completion and production cycle.  The minimum treatment necessary is best to minimize any damage to the coal and maximize the natural permeability, which is already present.

The coals of the N.E. Oklahoma Cherokee Basin have a relative high coal rank, a high gas content, and high permeability.  compared to coals in other basins, they are very high quality.  the limiting factor is the thinner beds than in other areas, as there are few problems. where coals are present in N.E. Oklahoma they produce well, limiting the risks associated with coalbed methane production.

Panoak CBM project is developed and operational.  The Project has fully established gas gathering and pipeline system, water disposal system, electric power and roads.

Panoak has re-completed 35 wells in existing wellbores in the coal seams as producers with no dry holes.  Because of this success our wells are a profitable operation over the past six years.  Panoak has acquired an additional 15,000 acres to drill new wells.

 

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