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International CSG Development & Economics
International CSG Development & Economics
International CSG Development & Economics
International CSG Development & Economics
International CSG Development & Economics
International CSG Development & Economics
International CSG Development & Economics
International CSG Development & Economics
International CSG Development & Economics
International CSG Development & Economics
International CSG Development & Economics
International CSG Development & Economics
International CSG Development & Economics
International CSG Development & Economics
International CSG Development & Economics
International CSG Development & Economics
International CSG Development & Economics
International CSG Development & Economics
International CSG Development & Economics
International CSG Development & Economics
International CSG Development & Economics
International CSG Development & Economics
International CSG Development & Economics
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International CSG Development & Economics

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Phasis presentation in Brisbane, Queensland, AUSTRALIA, May 2007.

Phasis presentation in Brisbane, Queensland, AUSTRALIA, May 2007.

Published in: Business, Economy & Finance
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  • 1. P phasis | consulting www.phasis.biz  International CSG Development & Economics Bettina Pierre-Gilles, Principal, Phasis Consulting 5th Annual CSM - CMM Summit, Brisbane , May 2-4 2007Bettina Pierre-Gilles   International CSG Development & Economics | May 2007
  • 2. P phasis | consulting » Agenda » Energy » Environment » Sustainability www.phasis.biz  {CBM = CSG = CBG = CSM = CMM} “No matter how you call it, it’s still unconventional!”Bettina Pierre-Gilles   International CSG Development Economics | May 2007
  • 3. P phasis | consulting Agenda » Energy » Environment » Sustainability www.phasis.biz   Introduction  2006 CBM Drilling in Canada  Drilling Practices per formation  Overview of CBM Development Globally  CBM Economics  Discussions / ConclusionBettina Pierre-Gilles   International CSG Development Economics | May 2007
  • 4. P phasis | consulting Agenda » Energy » Environment » Sustainability » Overview of North American Activities www.phasis.biz  Colors Denote Age of Coal Source: Canadian Society for Unconventional Gas (CSUG)Bettina Pierre-Gilles   International CSG Development Economics | May 2007
  • 5. P phasis | consulting » Energy Overview of North American Activities » Environment » Sustainability www.phasis.biz  Canada Rigs: 1999−2007 Oil Gas 800 40000 700 600 30000 Cumulative Rigs Number of Rigs 500 400 20000 300 200 10000 100 0 0 Jan 1999 Jan 2000 Jan 2001 Jan 2002 Jan 2003 Jan 2004 Jan 2005 Jan 2006 Jan 2007 Date Cumulative Number of Rigs © 2007 Phasis Consulting Canadian Rigs 1999 to 2007Bettina Pierre-Gilles   International CSG Development Economics | May 2007
  • 6. P phasis | consulting » Energy Overview of North American Activities » Environment » Sustainability www.phasis.biz  Natural Gas − Overall Production History 400 120000 350 100000 300 80000 Mcf/well/day 250 Wells 200 60000 150 40000 100 20000 50 0 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Year Wells Adapted from CAPP, 2005 © 2005 Phasis Consulting Canadian Natural Gas Production 1996 to 2004Bettina Pierre-Gilles   International CSG Development Economics | May 2007
  • 7. P phasis | consulting » Energy » Environment Overview of North American Activities » Sustainability www.phasis.biz  Overall Well History 16,000 14,000 12,000 10,000 Wells 8,000 6,000 4,000 2,000 0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Oil Gas Dry/Other Adapted from CAPP, 2005 © 2005 Phasis Consulting Canadian Wells Drilled by Type 1991 to 2005Bettina Pierre-Gilles   International CSG Development Economics | May 2007
  • 8. P phasis | consulting » Energy » Environment Overview of North American Activities » Sustainability www.phasis.biz  US Dry Natural Gas Production 1990−2025 10 8 6 Tcf 4 2 0 1990 1995 2000 2005 2010 2015 2020 2025 Year Associated / Dissolved Alaska Nonassociated Offshore Nonassociated Onshore on Conventional Onshore on Conventional Adapted from: EIA’s 2004 Annual Energy Outlook © 2005 Phasis ConsultingBettina Pierre-Gilles   International CSG Development Economics | May 2007
  • 9. P phasis | consulting Overview of North American Activities » Energy » Environment » Canadian Coalbed Methane Potential » Sustainability www.phasis.biz  Coalfields and Coalbed Methane Potential in British Columbia Sedimentary Basins Mines a Fording River b Greenhills Coal River c Line Creek Coalfield d Elkview ~6 Bcf e Coal Mountain Fort Nelson f Bullmoose Tuya River g Quinsam Coalfield h Willow Creek ~ 66 Bcf Properties Klappan and Wolverine+Perry Creek (WPC) Groundhog Tulameen Tsable River Coalfields Peace River Telkwa Fort up to 8.1 Tcf Coalfield St. John Gas Pipeline 60-200 Tcf Oil Pipeline h Alliance Pipeline MMCf/d Million Cubic Feet per day Telkwa BCf/d Billion Cubic Feet per day Coalfield f 400 M M C f/ d up to 130 Bcf Area Underlain by Coal (above 2000 m depth) W PC Telkwa Anthracite Prince Rupert Coking High Volatile Bituminous Graham Bowron River Island Coalfield Sub-bituminous to Lignite Coalfields up to 50 Bcf Hat Creek East Kootenay a Coalfield b Coalfields c Suquash Coalfield up to 0.5 Tcf Merritt ~19 Tcf up to 45 Bcf Coalfield (33 Tcf incl d Comox Coalfield mined areas) e g Princeton up to 1 Tcf Coalfield 80 Bcf Tsable River Vancouver Tulameen Estimated Coalbed Methane Gas in Place (to maximum 2000 m depth) Tulameen Nanaimo Coalfield Coalfield 2.7 BCf/d 1.8 BCf/d Bcf = Billion Standard Cubic Feet up to 300 Bcf ~42 Bcf Tcf = Trillion Standard Cubic Feet Victoria Basin Outlines : Geological Survey of Canada, unpublished: P. Hannigan, P.J. Lee, K Osadetz et al., 1993-1998. British Columbia Alberta (Alberta Geological Survey)Bettina Pierre-Gilles   International CSG Development Economics | May 2007
  • 10. P phasis | consulting » Energy Canadian Coalbed Methane Potential » Environment » Sustainability www.phasis.biz  Key Indicators: Alberta Horseshoe Canyon Mannville Producing Wells 10,723 9,762 (91%) 822 (7.7%) Water Variable Dry Saline Resources 60 - 118 Tcf 239 Tcf - Recovery 26% - 39% 21 - 38% 94.1% Vertical 96.3% Vertical 48.4% Vertical Drilling 5.9% Horizontal/Directional 3.7% Horizontal/Directional 51.6% Horizontal/Directional Median Daily Production Variable 94 Mcf/d 83 Mcf/d Top Three Operators Encana, Quicksilver, Apache Encana, Quicksilver, Apache Trident/Nexen, Encana, ApacheBettina Pierre-Gilles  10  International CSG Development Economics | May 2007
  • 11. P phasis | consulting » Energy » Environment Canadian Coalbed Methane Potential » Sustainability www.phasis.biz  Key Indicators:Bettina Pierre-Gilles  11  International CSG Development Economics | May 2007
  • 12. P phasis | consulting » Energy Canadian Coalbed Methane Potential » Environment » Sustainability www.phasis.biz  Canadian CBM Production Profile Median Daily Production Production Profile by Time on Production 300 6000 100 6000 250 5000 5000 80 4000 200 4000 60 Mcf/d Wells 3000 Mcf/d Wells 150 3000 40 2000 100 2000 20 1000 50 1000 0 0 0 0 0 12 24 36 48 2000 2001 2002 2003 2004 2005 2006 Months on Production Date Median Production Wells Active wells Regression Line 95% Prediction Interval © 2007 Phasis Consulting © 2007 Phasis ConsultingBettina Pierre-Gilles  1  International CSG Development Economics | May 2007
  • 13. P phasis | consulting » Energy » Environment Canadian Coalbed Methane Potential » Sustainability www.phasis.biz  Canadian CBM Economics: Costs ($CAD)* Horseshoe Canyon Mannville (Horizontal) Capital Costs (x1,000) Drilling and Completion (including facilities) $475 $1.2 - 2.4 M Operating Costs Fixed (per well/m) $675 $5,000 Variable $0.20/Mcf $0.43/Mcf Water Disposal $0 Varies * 1 CAD ≈ 1.08 AUDBettina Pierre-Gilles  1  International CSG Development Economics | May 2007
  • 14. P phasis | consulting Canadian Coalbed Methane Potential » Energy » Environment » US Coalbed Methane Potential » Sustainability www.phasis.biz  Major US Unconventional Gas Fields Total Basin Gas Basin (State) Field Name Type of Resource Production San Juan (New Mexico, Colorado) San Juan Basin Gas Area CBM/Tight Gas Sands 1.4 Tcf Ft. Worth (Texas) Newark East (Barnett) Gas Shale 496.5 Bcf Powder River (Wyoming) Wyodak/Big George Fairway CBM 336.1 Bcf GGRB (Wyoming) Jonah Tight Gas Sands 273.1 Bcf Denver (Colorado) Wattenberg/DJ Basin Tight Gas Sands 179.1 Bcf East Texas (Texas) Carthage Tight Gas Sands 214.1 Bcf Michigan (Michigan) Antrim Gas Shale 164.9 Bcf Piceance (Colorado) S.Piceance Basin Gas Area Tight Gas Sands 5.9 Bcf Gulf Coast (Texas) Giddings Tight Gas Sands/Chalk - Adapted from EIA 2005 Annual Reserves ReportBettina Pierre-Gilles  1  International CSG Development Economics | May 2007
  • 15. P phasis | consulting » Energy » Environment US Coalbed Methane Potential » Sustainability www.phasis.biz  CBM Reserves vs. Production 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 0 5,000 10,000 15,000 20,000 Bcf Reserves Production Adapted from EIA © 2006 Phasis ConsultingBettina Pierre-Gilles  1  International CSG Development Economics | May 2007
  • 16. P phasis | consulting » Energy US Coalbed Methane Potential » Environment » Sustainability www.phasis.biz  US Recoverable Unconventional Gas Advanced Resources National Petroleum Council US Geological Survey Mean Estimate (2004) (2003) (1995-2003) Tight Gas Sands 350 Tcf 175 Tcf 186 Tcf 204 Tcf Coalbed Methane 84 Tcf 58 Tcf 68 Tcf 70 Tcf Gas Shales 77 Tcf 35 Tcf 71 Tcf 61 Tcf Total 511 Tcf 268 Tcf 325 Tcf 368 Tcf Adapted from: Advance Resources International Inc. JAF02442Bettina Pierre-Gilles  1  International CSG Development Economics | May 2007
  • 17. P phasis | consulting » Energy » Environment » Sustainability www.phasis.biz  US CBM Economics: Costs ($USD)* San Juan Uinta Powder River Raton Drilling Completion $275,000 $375,000 $75,000 $330,000 Average FD costs in the US basins: $1.05/Mcf * 1 USD ≈ 1.26 AUDBettina Pierre-Gilles  1  International CSG Development Economics | May 2007
  • 18. P phasis | consulting US Coalbed Methane Potential » Energy » Environment » Sustainability » International Coalbed Methane Potential www.phasis.biz  Countries with active CBM development: Australia China India Others worth mentioning: Southeast Asia Africa Some European countriesBettina Pierre-Gilles  1  International CSG Development Economics | May 2007
  • 19. P phasis | consulting » Energy » Environment International Coalbed Methane Potential » Sustainability www.phasis.biz  China:  World’s largest producer (and consumer) of coal.  CBM Resource estimates: 36.8 tcm (found at depth of less than 2,000 m).  CBM can be extracted from 14 basins with average per basin reserves of 500 bcm.  7 CBM basins have reserves above 1,000 bcm: Ordos, Quinshui, East Yunnan, West Ginzhu, Jungar, Tuha and Erlianhote Basins.Bettina Pierre-Gilles  1  International CSG Development Economics | May 2007
  • 20. P phasis | consulting » Energy » Environment International Coalbed Methane Potential » Sustainability www.phasis.biz  India:  3rd largest coal producer in the world.  CBM Resource estimates: 13.4 Tcf.  NELP-VI results: ONGC awarded 25 blocks (operator of 24), Reliance awarded 7 deepwater blocks, and 1 offshore block was awarded to Cairn Energy.  NELP-VII: to be announced April 2007. Expectations: 100 blocks to be offered.Bettina Pierre-Gilles  0  International CSG Development Economics | May 2007
  • 21. P phasis | consulting » Energy » Environment International Coalbed Methane Potential » Sustainability www.phasis.biz  Other Countries Worth Mentioning: Southeast Asia:  Indonesia: Resource potentials: ~400 Tcf  Southern Sumatra will be the focus for ‘07 Africa:  Testing currently in progress to evaluate CBM potentials Ukraine:  Actively promoting development of its CBM potentials  Donetsk area CBM pilot projects may be underway in ‘07Bettina Pierre-Gilles  1  International CSG Development Economics | May 2007
  • 22. P phasis | consulting International Coalbed Methane Potential » Conclusion » Energy » Environment » Sustainability www.phasis.biz   Unconventional gas resources are now a necessary and permanent addition to the energy supply mix.  In the US, unconventional gas accounts for over 10% of natural gas production.  In Canada, more and more companies are looking at developing unconventional resources, as are many international countries.  Unconventional gas, whether CBM (CSG), shale gas or tight gas (sands) is here to stay. Whether in the US, Canada, Australia or any other basins, an understanding of the coal formations’ characteristics and the use/implementation of the proper drilling and completions technologies are necessary for successful and continued development, as well as to keep the projects economic.Bettina Pierre-Gilles   International CSG Development Economics | May 2007
  • 23. P phasis | consulting  Thank you! P phasis | consulting P.O. Box 1581, Station M Calgary, Alberta T2P 3B9 Canada Tel 403.542.3557 Fax 403.398.1331 bettina@phasis.biz www.phasis.bizBettina Pierre-Gilles  Short Title of Presentation. To edit: A-Master | Month Year

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