Western Gas Resources Inc. said Tuesday that its coalbed methane (CBM) gas production from the All Night Creek pilot project in the Big George area of the Powder River Basin began flowing into a sales line on Aug. 21. Fifty-three wells already have been drilled and connected, with 39 producing gas.

Production volumes have increased steadily since hookup and are currently producing at least 2.5 MMcf/d. Two of the wells already are producing 250 Mcf/d and 230 Mcf/d, well ahead of forecasts, said the company. An additional 45 wells are scheduled to be drilled in All Night Creek by Western and its partner by next June, and 121 more wells are in the review process by the Bureau of Land Management under its federal drainage environmental assessment. Western is providing all gathering and compression services to the pilot area.

While not disclosing its partner, Western and Barrett Resources are 50-50 partners on several projects in the region and are the largest Powder River CBM operators. Barrett was purchased by Williams Cos. earlier this year (see Daily GPI, May 8). Last January, the two announced that their gross production hit their year-end target of 200 MMcf/d in mid-December 2000, then exceeded that goal by producing 206 MMcf/d in the last two weeks of the year (see Daily GPI, Jan. 5). The Denver-based producers hold approximately 531,000 net acres under lease in the basin, and the companies drilled about 950 gross wells in 2000. Another 800 gross wells already have approval from the Wyoming Department of Environmental Quality for production through this year.

Eight other Big George pilot drilling areas also are under development by Western and its partner, and are in various stages of testing, drilling or de-watering. All together, 203 Big George wells have been drilled, with another 24 planned through the rest of 2001.

On Aug. 15, Wyoming and Montana officials signed an 18-month interim agreement to monitor water flow from Wyoming into Montana from the Powder and Little Powder Rivers. The agreement, said Western, should allow for water discharge permits to be issued this fall for CBM wells that discharge water into those river drainages. However, discharges into other drainages are not holding up permitting, Western said. State officials plan to negotiate a permanent agreement within the next two years about discharges.

CEO Lanny Outlaw was optimistic about the future of the so-far prolific Big George basin, and said he believed that a “significant portion” of the coal there “could be commercially productive.” Already, he said several operators in the Big George pilot have established CBM production based on “early indications from core samples and de-watering activities.”

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