The coalbed methane (CBM) play in the Atlantic Rim of Wyoming continues to pay dividends for Denver-based Double Eagle Petroleum Corp., which Wednesday reported a record 230% increase in 4Q2008 production over the same period of 2007.

The company, which is 95% weighted to natural gas, set a record for annual production in 2008, ending the year with output totaling 6.7 Bcfe, or 123% higher than the 3.0 Bcfe produced in 2007. Most of last year’s gains were from drilling success in the company’s Catalina Unit in the Atlantic Rim, some of which it operates, as well as its stake in some nonoperated Pinedale Anticline properties.

Double Eagle in 2008 drilled 24 production wells and six injection wells in the Atlantic Rim, and five new wells were on production at year’s end. One well was determined to be a dry hole, but the remaining 18 wells are expected to be ready to ramp up by the end of March. At the nonoperated Sun Dog and Doty Mountain units in the Atlantic Rim last year, Double Eagle participated in 65 new production wells, and those are expected to be ready by July. The independent also participated in drilling 24 new wells in the Pinedale Anticline; those wells also are expected to be completed this year.

Proved reserves at year-end 2008 were estimated at 88.9 Bcfe, compared with 73.7 Bcfe at the end of 2007. The average price to estimate year-end 2008 proved reserves was $4.51/MMcfe versus $5.99/MMcfe at the end of 2007.

This year Double Eagle’s capital spending plans range between $10 million and $20 million. Most of the focus will be to enhance output from producing wells in the Atlantic Rim and from drilling new development wells in the Pinedale Anticline and Waltman area of the Wind River Basin. However, the company plans to “continually evaluate the market,” and if conditions change, it said it may modify its budget.

Financial results are scheduled to be issued on March 12.

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