methane

Following years of legal wrangling, coalbed methane (CBM) development in Montana’s Powder River Basin may be a go. The Bureau of Land Management (BLM) Tuesday issued a carefully worded Record of Decision (ROD), which would permit more than 18,000 natural gas wells to be drilled in the basin over the next 20 years.

Devon Energy Corp. has acquired a 44% stake in Chevron Corp.’s leasehold in the Drunkard’s Wash coalbed methane natural gas field in east-central Utah. The field, which has about 51,000 net acres, is being developed jointly by Chevron, ConocoPhillips and XTO Energy Corp.; current net output is 40 MMcfe/d. For the stake, Devon transferred back to Chevron around 14.2 million shares of Chevron common stock, which it has held since acquiring PennzEnergy in 1999 (see Daily GPI, Aug. 19, 1999). In exchange, Devon received a stake in the field and $280 million in cash from Chevron. In August Devon retired exchangeable debentures issued by PennzEnergy that were associated with the Chevron shares, which enabled Devon to make the exchange transaction.

For the third month in a row, Double Eagle Petroleum Co. broke a record for natural gas production at its Catalina Unit, an emerging coalbed methane play located in the Atlantic Rim of Wyoming.

A proposed coalbed methane (CBM) project in British Columbia’s Elk Valley is drawing opposition on both sides of the U.S./Canadian border. BP plc’s Canadian subsidiary in January announced it would spend C$1 billion to develop the Mist Mountain CBM Gas Project in the province’s Crowsnest Coalfield (see Daily GPI, Jan. 28). BP also entered into a commercial agreement with Elk Valley Coal to evaluate CBM opportunities on the Elk Valley acreage. However, the city council in Fernie, BC, wants to prevent the Elk Valley development. The council unanimously passed a resolution that provincial regulators rescind or not issue leases to BP to explore or develop the Elk Valley region because of the possible environmental contamination. The tourism industry in Fernie, which is about 50 miles north of Montana, could be jeopardized, the council stated. Because the Elk River sends water into Montana’s Lake Koocanusa, which is near Glacier National Park, some U.S. stakeholders also have voiced their opposition to BP’s plans. Sen. Max Baucus (D-MT) said in February that the potential CBM project in the Elk Valley was a “worry” for Montana because of possible contamination to the border-straddling Lake Koocanusa. Provincial officials said environmental reviews are their top priority, and concern in Fernie and Montana is premature. Also, not all of the area’s residents are opposed to the CBM proposal, noted BC’s Ministry of Energy, Mines and Petroleum Resources. The ministry said it would consider the Fernie opposition, but it also will consider other regional stakeholders that are in favor of the development.

With a trio of solid results from unconventional natural gas plays in Cutbank Ridge, Jonah and East Texas — and coalbed methane (CBM) joining in — EnCana Corp. delivered a chorus of good news for both its earnings and production in the final three months of 2007.

Canada’s National Energy Board (NEB) has delivered a dreary forecast for Canadian conventional natural gas production in the short term, estimating a decline of 7-15% in deliverability between now and 2009.

Canada’s National Energy Board (NEB) Wednesday delivered a dreary forecast for Canadian conventional natural gas production in the short term, estimating a decline of 7-15% in deliverability between now and 2009.

Two Montana senators met with BP officials last Monday to express their opposition to the energy company’s plan to drill for coalbed methane (CBM) on the Canadian side of the Flathead River basin, saying the wastewater from the activity would pollute Montana water.

Two Montana senators met with BP officials Monday to express their opposition to the energy company’s plan to drill for coalbed methane (CBM) on the Canadian side of the Flathead River basin, saying the wastewater from the activity would pollute Montana water.