Riverton, WY-based U.S. Energy Corp. and its Crested Corp. subsidiary said their joint subsidiary, Rocky Mountain Gas Inc. (RMG), has increased its coalbed methane activities in the Powder River Basin of northeastern Wyoming just in time to take advantage of higher gas prices.

Peter G. Schoonmaker, president of RMG, said winter season prices for Powder River Basin gas have more than tripled from the lows last summer. “If the gas transmission companies achieve the proposed increase in pipeline capacity out of the Powder River Basin, we and other producers anticipate receiving increased prices for gas nearing the seasonal national averages.”

RMG said 24 wells are now producing 1.9 MMcf/d on the 1,940 gross acre Bobcat property (see NGI, June 10, 2002). The company noted that many of the wells are still in the dewatering phase and are expected to show increasing natural gas production rates in the months ahead.

On the 6,305 gross acre Clearmont, WY tract, RMG said a total of 33 wells have been completed in the Roland and Anderson coal seams. Currently, 19 wells are on-pump and in the dewatering phase. Management is now estimating that initial gas sales could commence from the project in the second half of 2003. Because of the Clearmont project’s out of the way location, CMS Field Services Inc. constructed a gas gathering system, which it just completed. CMS Field Services has also installed a 5 MMcf/d compressor and completed installation of all related infrastructure in anticipation of commercial production volumes later this year.

“Looking forward, RMG anticipates becoming a significant player in the coalbed methane gas sector through drilling our own projects and through the acquisition of producing properties,” stated Schoonmaker. U.S. Energy and Crested Corp., through RMG, own working interests in over 280,000 gross acres of prospective land for coalbed methane in the Powder River Basin of Wyoming and Montana and acreage adjacent to the Greater Green River Basin in southwest Wyoming.

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