Gas has been produced from coal seams in Oklahoma as long ago as the 1930s. But today the Sooner State is home to a coalbed-methane (CBM) play that boasts some of the strongest economics of any play in the nation. In Haskell, Pittsburg, Latimer and LeFlore counties, in eastern Oklahoma's Arkoma Basin, some 1,500 CBM wells have been drilled to date. In 2003, Oklahoma recorded 20 billion cubic feet (Bcf) of CBM production from these Arkoma Basin wells, bringing the cumulative CBM produced from this area to 70 Bcf. The main target is the Middle Pennsylvanian Hartshorne, a bituminous-rank coal that occurs in seams between three and eight feet thick throughout a broad part of the basin. The Hartshorne has excellent gas contents that range up to 560 cubic feet per ton, says the Oklahoma Geological Survey (OGS). Its average depth is 1,500 feet, but it can be found shallower than 300 feet and deeper than 4,000 feet, depending on structural position. Generally, in the south and east parts of the play, the seam splits into an upper and lower Hartshorne. In addition, the shallower McAlester and Secor coals offer potential for CBM production, and there is some drilling in these seams as well. The current generation of CBM activity began in the late 1980s. Bear Production Co., a local producer, drilled a couple dozen vertical wells in Kinta Field in Haskell County. In the early 1990s, other firms took up the play. Vertical Hartshorne wells were an economic challenge, as completions usually resulted in wells with initial rates of less than 100,000 cubic feet per day. Horizontal drilling kicked off in the late 1990s. Tulsa-based Mannix Oil Co. Inc., a private firm, pioneered the horizontal approach, and the operator was acquired by Williams Production Co. in 2001. Mannix had obviously hit upon a workable way to exploit the Hartshorne seams, and other operators took notice. At present, nearly every Hartshorne well is horizontal and some 30 operators are active in the Arkoma Basin play. The laterals average around 1,800 feet in length, and initial flow rates can be as high as a couple million cubic feet of gas per day. Most of the wells drilled to date are on the flanks of the large northeast-southwest trending anticlines that run through the Arkoma Basin. Although as CBM plays go, the Hartshorne is quite dry, synclinal wells tend to produce more water. In a group of nearly 900 wells, average initial water production was just 30 barrels per day, reports the OGS. Until about four years ago, the Oklahoma Corporation Commission assigned CBM wells to various conventional fields, either including them in the fields or extending field boundaries to incorporate the wells. As the numbers of wells in new areas grew, it became clear that the Hartshorne was a continuous-type accumulation. Now, the commission uses countywide field designations for CBM wells. In general, the Arkoma wells follow the typical CBM production profile, with an initial phase of produced water, a period of peak production and a phase of prolonged decline. Estimates of 500- to 700 million cubic feet of reserve potential per well and 30-year producing lives have been stated by operators active in the play. Five times the volume Questar Exploration & Production Co., an affiliate of Salt Lake City-based Questar Corp., has been drilling Hartshorne CBM wells for more than a decade, beginning with vertical wells drilled in the mid-1990s and using horizontal drilling since 2000, says Bob Nikkel, Questar's Tulsa division general manager. In 2000-01, Questar drilled seven horizontal wells as part of an initial pilot project. For the following two years, the company evaluated these wells and also participated in wells operated by others in the play. "We concluded that, to be successful, Questar would need a new ultra-low-pressure gathering system (less than 5 psi) and would have to commit to a continuous drilling program. The continuous program would enable us to optimize our operations and minimize our well costs," says Nikkel. Since June 2003, Questar has drilled 72 wells in the play. All of its drilling to date has been in Haskell County, mostly in the Brooken Field area. At present, it has 100 operated CBM wells, 80% of which are horizontal wells. In addition, Questar has participated in approximately 50 outside-operated vertical and horizontal CBM wells. Its gross operated gas production from the play is now 20 million cubic feet per day. "The horizontal wells deliver five times the gas volume of a vertical well, for two to three times the cost," says Nikkel. Questar drills 2,000-foot to 3,000-foot laterals, sets perforated liners in the laterals and starts production. "The biggest challenge of the drilling operation is confining the horizontal well path to the four- to six-foot-thick coal interval," says Jeff Tommerup, operations and production manager. The company drills four to five horizontal Hartshorne wells per section. This year, Questar plans to drill 35 wells in Haskell and Pittsburg counties, keeping a rig busy for all of 2005. In addition, it will drill six to eight deeper conventional wells for Spiro, Cromwell and other targets. Although the Arkoma is a mature basin, Questar's CBM operations have required significant new infrastructure. We've had to put in roads and pipelines," says Tommerup. The company has streamlined its operations: from spud to completion to pipeline hookup to gas sales takes just 15 days. "It's like a factory. The wells start selling gas within four days of releasing the drilling rig to the next well," he says. While voluminous water production is not an issue in the Hartshorne, there are other problems. Coal fines can play havoc with pumps, and can get into the compressors and pipelines if they are not handled properly. Questar's average peak rates for its horizontal Hartshorne coal wells, which it achieves some 30 to 45 days after it begins production, are about 500,000 cubic feet per day. From the stake in the ground to gas flow into the pipeline, the company spends about $450,000 per well. With results like these, it's no wonder the Hartshorne is such a popular objective. Z-Pinnate Dallas-based CDX Gas LLC has been working in the Arkoma Basin for the past six years. The company specializes in unconventional resource plays, and has developed a patented drilling and completion technology called Z-Pinnate that features multiple horizontal laterals. It uses its own rigs, drillers and directional tools. "Of all the areas of North America that we drill, the Arkoma has been the most technically challenging," says Doug Wight, vice president, business development. "It has dissecting sand channels, faults and very complex depositional geology." CDX started drilling vertical wells in the basin in Sebastian County, Arkansas, but was unhappy with the production levels. "The Lower Hartshorne coals in the area we were drilling are quite mature-they are almost semi-anthracite-so they had permeabilities of a millidarcy or less." The tight, but very gassy, coals seemed well suited for horizontal drilling, so the company tried a small pilot using its Z-Pinnate technology. "That worked very well, and that's what we are doing today." Through the end of 2004, CDX had drilled 26 pinnate wells in the Arkoma Basin, with some 500,000 feet of hole. It has been enlarging its well spacing over time, and at present drills on 320- to 480-acre patterns. "Our Arkoma wells average 15,500 feet, and we can drill about 600 to 800 feet of hole per day. To make this play work, we have to stay in the coals and drill a lot of footage fast." The results are heartening: CDX's average initial potential per well is 700,000 cubic feet per day. "We found that the crests of the anticlines have very complex geology, which is not good for CBM development. On the flanks we have more consistent coals, which work better," says Wight. In 2005, CDX and its partner Dart Energy Corp. plan to continue to acquire properties and to drill some 10 pinnate wells in the Arkoma Basin. Improvements on verticals El Paso Production Co. kicked off its Arkoma Basin CBM program in 2000, after studying it for about a year, says Bill Griffin, senior vice president, onshore division. "We performed regional evaluations covering most of the U.S. looking at CBM opportunities, and we high-graded prospectivity based on a number of parameters. The Arkoma Basin was selected as one of our primary focus areas, and the company started acquiring acreage." Embarking on an acreage acquisition program in a very mature, conventional producing basin was obviously a challenge. "We've built our acreage position a little here and a little there," says Griffin. "It wasn't any massive acquisition that got us into the play. Often, what we did was work deals to sever CBM shallow rights from deeper, conventional producing zones." At present, El Paso is producing 17 million net cubic feet of gas per day from 380 wells in the play, all in Oklahoma. Of that total, 105 are horizontal wells. "Initially our wells were all vertical, but we were disappointed with their performance. On a program basis, they were marginal." El Paso started experimenting with horizontal wells in 2002, and during 2003 it became more excited about this approach. By 2004, it was drilling all of its wells as horizontals. Initially, the company took its laterals out 1,500 feet, but it has continued to extend the lengths. Its most recent well featured a 4,700-foot lateral. "We see a direct correlation between the lateral lengths and the ultimate reserves. A realistic average recovery is 500 million cubic feet, with a range from 250- to 900 million cubic feet per well." The company has noted relationships between well productivity and the thickness and the depth of the coal. "We work within a depth window that we think is the best indicator of productivity," says Griffin. A typical Hartshorne horizontal well currently costs the company around $400,000, and the better wells have reached peak rates of 800,000 cubic feet per day. The company drills up to four laterals per section. "We feel like that's optimal spacing at this time," says Griffin. "We like the Arkoma because it has a single, thick coal seam that lends itself to horizontal drilling, and it has very low water content. On average, we make less than 10 barrels of water per day per well." Because of the low water content, the Hartshorne wells can flow for an extended length of time after completion. "We're able to flow these wells for a period of years before we have to put pumps on them." Other positive attributes are that the basin is laced with established gas-production infrastructure, and the state is very familiar with- and proactive toward- energy development. "Oklahoma offers regulatory support, the surface and royalty owners are knowledgeable, and oilfield services are readily available." This provides an ease of operations often missing in other CBM producing areas. Currently, El Paso is running two rigs in the play. This year, it plans to drill 65 to 70 wells in Haskell, LeFlore and Latimer counties. It will also reenter some of its older vertical wells to drill horizontal laterals, and it will drill some dual stacked laterals to tap the gas in the thinner Upper Hartshorne coal. "The biggest challenge we face today is the escalating cost of services. We continue to focus on improving our efficiencies so that we can offset increasing costs and keep the play at an acceptable rate of return."
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