Supurva Healthcare Group Inc (SPRV)

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Northeast Oklahoma O&G play in early stages of development:

Coalbed Methane Potential and Activity of the Western Interior Basin*

By

Steven Tedesco1

Search and Discovery Article #10059 (2004)



*Adapted from “extended abstract” for presentation at the AAPG Annual Meeting, Salt Lake City, Utah, May 11-14, 2003.

Two other articles on coalbed methane accompany this presentation; they are: Frontier Areas for Coalbed-Gas Exploration in Utah, by David E. Tabet and Jeffrey C. Quick, and Coalbed Methane Potential and Activity of the Illinois Basin, by Steven Tedesco.



1Dorado Gas Resources LLC, Englewood, CO; current address: 16746 E. Prentice Circle, Aurora, CO 80015-4130 ([e-mail])


Background

The Western Interior Basin, located in Southwestern Iowa, Southeastern Nebraska, Western Missouri, Eastern Kansas, and Northeastern Oklahoma, is composed of the Cherokee Basin or Platform, Forest City Basin, and the Northeast Shelf in Oklahoma. The coals in the Western Interior Basin are Middle to Upper Pennsylvanian and generally are less than three feet thick but are laterally extensive. The primary coals of interest are in the Cherokee and Marmaton Groups of Middle Pennsylvanian age. The coals have sulfur contents, moderate to high ash values, and low moisture, and rank is medium volatile on the western side of the basin in Kansas and Oklahoma grading to High Volatile C in Southern Iowa and Eastern Missouri. Coal mining activity has been limited; it began in the early part of the last century, and most of it has been in the form of surface mines near where the coals crop out. There have been documented mine explosions in the underground mines of Eastern Kansas and Western Missouri. Economically important coal deposits in Illinois and Wyoming have limited the viability of the coal industry in the Western Interior Basin. The basin has historically produced gas from black shales or slates and coals from areas just north of Kansas City to northeast Oklahoma from as early as the 1920s. The exploitation of this resource diminished in the 1930s to an occasional completion or for providing gas for a house or local business. In the mid-1980s the revitalization of the exploitation of this resource began in Northeast Oklahoma and Southeast Kansas due Federal tax credits. However, because the coalbed methane model during this time was the San Juan and the Warrior basins, the thin nature of the coals in the Western Interior Basin, at the time, restricted gas markets, and the presence of saltwater produced from the coals limited their exploitation and development. In 2001, Devon Energy purchased a Patrick Exploration project of 100 plus wells and associated acreage in Northeast Oklahoma and an acreage project for a Denver group in Southeast Kansas, sparking renewed interest in the area. Activity in the area was further accelerated in the basin, with growing environmental opposition elsewhere to coalbed methane development, problems with water disposal, federal and state inability to permit wells, and a gas price differential that reached as high as $2.10 in July, 2002, in Wyoming, Montana, and Colorado. In the Kansas City area, which lies in the heart of the Western Interior Basin, there is a growing gas market; product prices vary between Mid-Continent and NYMEX with minimal or no differential; there is a declining product in the existing pipelines that extend from Western Kansas and Oklahoma to Kansas City and beyond; and there are friendly regulatory bodies, lack of federal acreage or involvement, and limited to nonexistent environmental activity. The play is in the early stages of exploitation. Reported gas content in the coals varies from 5 to 450 scf per ton. Gas quality varies from 96 to 98%% methane, 1% to 3%+ ethane +, 0.5&+ CO2 to 92% methane, a few percent nitrogen, and CO2 with BTU contents varying from 850 to 1050. Water rates vary from a few barrels to over 1000 barrels a day. Initial completion practices began with single-zone completions until 2002, when the State of Kansas vacated the rules preventing commingling several zones in the same well specifically being produced for coalbed methane and shale.