Coalbed-methane (CBM) reserves in Western Canada could reach 9 trillion cubic feet and daily production could reach 1.4 billion cubic feet (Bcf) by the end of 2010, says Steven I. Paget, an analyst with FirstEnergy Capital Corp., Calgary. He estimates companies will spend C$13.2 billion to develop the CBM reserves during the next six years. Dozens of operators are expected to drill thousands of wells to tap this up-and-coming resource. Currently, producers are making more than 100 million cubic feet of gas per day from Late Cretaceous coals in the Horseshoe Canyon formation. Found at depths between 400 and 800 meters, the coals are remarkable in that they produce very little water. Recoverable reserves average between 1.5- and 2.5 Bcf per section, and wells initially produce at average rates of 70,000 cubic feet per day. As rates tend to incline, the wells are averaging 110,000 cubic feet per day after a year. Development of the play is in its infancy in the immense fairway, which covers some 19,200 square kilometers to the east and south of Calgary. As promising as the Horseshoe Canyon appears, an even greater but much more speculative target lies below it in the Early Cretaceous Mannville formation. This coal-bearing section is found at depths between 800 and 1,400 meters. The Mannville coals are much thicker than those in the Horseshoe Canyon, and Mannville CBM wells could produce at higher rates and recover more gas. Pilot projects are under way in the Fort Assiniboine area, northwest of Edmonton, Alberta, and in the Big Valley area, southeast of Red Deer. In 2003, 71 wells were drilled to Mannville coals, and the 2004 tally is expected to be in the range of 200 wells. No commercial production has been established to date, but Paget is optimistic that the Mannville will be developed. Other areas of interest to CBM developers include the Elk Valley region in southeastern British Columbia and southwestern Alberta; the Ardley coals in the Pembina and Pine Creek/Edson regions in Alberta; and the Gates and Gething coals in northeastern British Columbia. In his forecast of future CBM production in Western Canada, Paget assigned zero to minimal amounts from these regions, however. He predicts the industry can add 160 million cubic feet of CBM production in the next year. "This is a very early stage in a new play that we predict will be very significant for Canadian production by the end of the decade," says Paget. "Investors should own equities that have leverage to Canadian coalbed-methane production and reserve potential." At present, the four most active firms in the Canadian play are Apache Corp., EnCana Corp., MGV Energy Inc. (a subsidiary of Quicksilver Resources Inc.) and privately held Trident Exploration Corp. -Peggy Williams