Coalbed

Marathon Oil Corp. said Tuesday it is soliciting offers for subsidiary Pennaco Energy Inc.’s extensive coalbed methane (CBM) assets in the Powder River Basin of Wyoming and Montana. The producer paid $500 million for the Denver-based company in 2000 (see Daily GPI, Dec. 27, 2000).

Pioneer Natural Resources Co., a Dallas-based independent oil and natural gas producer, announced plans Tuesday to acquire a leading developer of coalbed methane (CBM) reserves in the Rocky Mountains, Evergreen Resources Inc., for an estimated $1.78 billion in cash and stock, plus the assumption of $300 million in debt.

A subsidiary of Denver-based junior independent Galaxy Energy Corp., has increased its working interest in its coalbed methane (CBM) properties near Sheridan, WY after purchasing about 3,200 acres at the Buffalo Run prospect.

Fort Worth-based Quicksilver Resources Inc. moved forward with its Canadian coalbed methane (CBM) program in 2003, ending the year averaging 5.7 MMcf/d, with year-end production from its CBM wells at 16 MMcf/d. For all of its projects, full-year gas production totaled 34.5 Bcf, while production in the fourth quarter was 9.3 Bcf, up from 8.6 Bcf in 4Q2002. Natural gas, including natural gas liquids, comprised 89% of the company’s total production in the fourth quarter of 2003. Through its Canadian subsidiary, MGV Energy Inc., an $89 million capital budget for development and exploration is planned in 2004. Most of this budget will target CBM development while continuing exploration and piloting efforts in new areas. MGV presently holds leases and drilling rights on more than 525,000 net acres in Canada. Fourth quarter net income was $5.8 million on revenues of $36.8 million, or $0.23/share, compared with 4Q2002 net income of $4.3 million ($0.21/share) on revenues of $31.8 million. Net cash from operating activities for the fourth quarter of 2003 was $21.4 million versus $20.2 million for the fourth quarter of 2002.

Calgary-based EnCana is digging in to expand its vast coalbed methane (CBM) resources, announcing Tuesday an ambitious plan to develop 700,000 acres of property in southern Alberta — assets estimated to contain more than 2 Tcf of recoverable natural gas.

With its coalbed methane production beating even its own estimates, Quicksilver Resources Inc. reported third quarter 2003 net income of $5.2 million ($0.23/share) on revenues of $33.5 million, marking a significant increase over third quarter 2002 net income of $3.6 million ($0.18/share) on revenues of $30.3 million.

With natural gas prices up, Consol Energy Inc. recalculated its future net cash flows of proved coalbed methane gas (CBM) reserves, estimating a current value of $1.09 billion before taxes, and assuming a 10% discount rate, as of Dec.31, 2002. The value is nearly two-and-one-half times 2001’s reserve value of $432 million.

With thousands of coalbed methane (CBM) wells covering the Powder River Basin in Wyoming and hundreds of drilling permits still to be reviewed, the Wyoming Department of Environmental Quality (DEQ) has been working overtime and short staffed to review the huge backlog of permits, and contend with complex out-of-date regulations at the same time.

XTO Energy Inc. has added another 29 MMcf/d to its current production base after completing the acquisition of some coalbed methane (CBM) properties in southwestern Colorado.