A new firm has opened its doors in Sheridan, Wyoming. Pinnacle Gas Resources Inc. was formed a few months ago to work the coalbed-methane play in the Powder River Basin of Montana and Wyoming. In June, a division of Credit Suisse First Boston completed a $30-million financing for the fledgling firm. At the same time, Rocky Mountain Gas Inc., a business of Riverton, Wyoming-based U.S. Energy Corp. and subsidiary Crested Corp., contributed $7.5 million in properties and assets to Pinnacle in exchange for common stock. And, CCBM Inc., a subsidiary of Houston independent Carrizo Oil & Gas Inc., put its interests in the same properties, also valued at $7.5 million, into the new entity. Carrizo took common stock as well. Pinnacle received the 1,940-acre Bobcat property in Campbell County, Wyoming; the 8,000-acre Clearmont project in Sheridan County, Wyoming; and the 80,000-acre Kirby project in Big Horn County, Montana. Pinnacle has 24 producing wells at Bobcat, making 2.5 million cubic feet of gas per day from Cook and Canyon coals. Three additional coals are also prospective on the property. At Clearmont, it has 19 wells in the shallow Roland and Anderson coals that are in the dewatering phase and 14 wells that will shortly begin dewatering. Several deeper coals that occur on the property have potential as well. Kirby is undeveloped, with just a few exploratory wells drilled to date. The Fort Union coals found in this area are similar to seams that produce to the south in Wyoming. Simultaneous with its receipt of the financing, Pinnacle entered an earn-in joint venture with Gastar Exploration Ltd., whereby Pinnacle paid Gastar $6.2 million, and committed to spend another $14.5 million to develop Gastar's Wyoming acreage position during the next 2.5 years. In return for its investment, Pinnacle will earn a 50% interest in the Gastar assets, which consist of 200 completed wells and 38,000 gross acres of leases. Presently, there are 95 producing wells on the acreage, all in the early stages of dewatering, which are making 2 million cubic feet of gas per day. Peter G. Schoonmaker is the new chief executive officer of Pinnacle. "People are the key to this business, and we're starting at the top of the learning curve," he says. Pinnacle has already hired 12 people who have been involved in coalbed-methane development since its inception, and who total among them more than 175 years of industry experience. The Gastar acreage is sprinkled around Campbell County, with leases extending from just south of Pinnacle's Bobcat project up to the Recluse area. Pinnacle has divided it into two areas, Squaw Creek and Ring of Fire. Just around 10% of the acreage is developed, mainly in the Squaw Creek area. The properties produce from various coal seams in the Paleocene Fort Union formation, including the Smith, Swartz, Anderson, Canyon, Cook and Wall-Pawnee zones. This year, the company plans to drill and complete around 150 wells, on both its Rocky Mountain Gas and Carrizo properties and on its Gastar joint venture. It is taking a somewhat atypical approach to development: "Our program is based on multiple-zone completions. We want as few wells as possible, that are as productive as possible." For instance, in the Squaw Creek area, Pinnacle's wells feature two distinct sets of completions-the Canyon and Cook coals are completed as one zone, and the Wall and Pawnee are completed in a twin well as a second zone. The multi-zone completion technique is well suited for Pinnacle's acreage, and also has the benefit of reducing landowner issues, says Schoonmaker. In this year's program, Pinnacle plans to wind up the development of its Bobcat property. It is also drilling all of the available locations at Squaw Creek Field. And, it has opened two new areas to production. Additionally, the firm hopes to launch a pilot project on its Kirby property in Montana. "We have just submitted a plan of development to the state for eight wells. If we get the plan approved in time, we'll drill those this year." Pinnacle is just in the early stages of executing its business plan. It has hundreds of locations in inventory, and lots of room to grow. Long-range, its goals are to become a major coalbed-methane operator, consolidating assets of smaller firms and applying a high-level of technical expertise to its acquired properties. "We've hit the road running, hard," says Schoonmaker.
Recommended Reading
Sinopec Brings West Sichuan Gas Field Onstream
2024-03-14 - The 100 Bcm sour gas onshore field, West Sichuan Gas Field, is expected to produce 2 Bcm per year.
Orange Basin Serves Up More Light Oil
2024-03-15 - Galp’s Mopane-2X exploration well offshore Namibia found a significant column of hydrocarbons, and the operator is assessing commerciality of the discovery.
Second Light Oil Discovery in Mopane-1X Well
2024-01-26 - Galp Energia's Avo-2 target in the Mopane-1X well offshore Namibia delivers second significant column of light oil.
Equinor Receives Significant Discovery License from C-NLOPB
2024-02-02 - C-NLOPB estimates recoverable reserves from Equinor’s Cambriol discovery at 340 MMbbl.