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OKLAHOMA CORPORATION COMMISSION

Oil and Gas Conservation Division

CoalBed Methane Fact and Future In Oklahoma

November 2004Jamal Daneshfar, PE

Out Lines:

. Fact and figures about Coal bed methane

. Regulation for Unconventional Gas Wells

. Activities on Conventional Gas Wells

. Incentive Program, Senate Bill 535

. Horizontal Completion in Counties

. Question /Answer

Facts and Figures:Location:

. North East Oklahoma Shelf

. Arkoma Basin

Geological Age:

. Desmoinesian (Middle Pennsylvanian)

Remaining Resources:. 8 Billions Ton

Area of Coverage. 8000 square miles in 19 counties

Production :

. Total 280 Millions Short Ton (End of 2001)

Ash Percentage:. Minmum 4%, Hartshorne in Leflore . Maximum 15%, Hartshorne in Leflore

Depth of Completion

. Minmum 175 ft, Hartshorne in Leflore

. Maximum 3651 ft , Booch in Pitsburg

SCF/Ton

. Minimum 79 , Hartshorne in Leflore

. Maximum 547, Hartshorne in Leflore

Coal Bed Methane Resources

Location of Coal Bed Methane Resources

Area of Oklahoma Coal bed Activity( Courtesy Oklahoma Geological Survey)

( Courtesy Oklahoma Geological Survey)

Regulation :

The Coalbed Methane activities are regulated similarly to Minimum

Unallocated Gas Well. Different aspect of activities reviewed as :

Drilling:

. Intent to Drill, From 1000, Rule 165:10-3-1

. Surface Casing, 50 ft below treatable water level, Rule 165:10-3-4

Testing :

. Form 1016 to report shut in pressure to obtain Minimum allowable

. Form 1030 to adjust the allowable in case the WOR is over 3:1

. Form 1022 to report the flaring or venting of the gas

Geology/ Engineering:

Reserve Calculation will be based on gas content of the rock and not onmaterial balance or volumetric technique.

Increase density will be reviewed based on reserve calculation or geologicallimitations.

Commingling application, Form 1023 required for production of more thanone zone

Completion Report, Form 1002A, 1002C required for any completion orrecompletion

Incentive Program

The Senate bill 535 is the only incentive program applicable to coal bed methane activity in Oklahoma

The production from Coal bed methane will be exempted fromgross production. It has three different options:

Twenty Four Month Exemption, prior to July 1994

Option One:

For any incremental production which results from a horizontally drilled well producing prior to July1, 1994

Twenty Four Month Exemption, prior to July 1, 2002

Option Two:

For any horizontally drilled well producing prior to July 1, 2002 , which production commenced after July 1, 1995

Forty-Eight month exemption, prior to July 1, 2006

Option Three

For any horizontally drilled well , which production commenced after July 1, 2002

Completion Activity Comparison in Each Year

Year 2001 Completion Type

0500

10001500200025003000

Deep Hole Staight Hole Horizontal Hole

Year 2000 completion Type

0500

10001500200025003000

Deep Hole StaightHole

HorizontalHole


0

500

1000

1500

2000

2500

Deep Hole Staight Hole Horizontal Hole


0500

10001500200025003000

Deep Hole Staight Hole HorizontalHole

Five Years Completion Activity in Oklahoma

Year Deep Well Horizontal Hole Straight Hole Total2000 126 69 2738 29362001 171 100 2729 30002002 104 123 2137 25342003 163 268 2845 32762004 160 311 2137 2608

Five Years Completion Activity In Oklahoma

Total Completions

0500

100015002000250030003500

2000 2001 2002 2003 2004

Years

Num

ber

of w

ells

Five Years Horizontal Completion In Oklahoma

Horizontal Hole Completion

050

100150200250300350

2000 2001 2002 2003 2004

Years

Num

ber

of W

ells

Five Years Vertical Completion in Oklahoma

Straight Hole Completion

0500

10001500200025003000

2000 2001 2002 2003 2004

Years

Num

ber

of W

ells

Five Years Deep Well Activity in Oklahoma

Deep Well Completion

0

50

100

150

200

2000 2001 2002 2003 2004

Years

Num

ber

of W

ells

Horizontal Completion in Counties

Number of Horizontal HoleYear 2000

05

1015202530

Gar

vin

Har

per

Has

kell

Latim

er

Leflo

re

Linc

oln

Pitt

tsbu

rg

Push

nata

ha

Step

hens

Texa

sNum

ber

of W

ells



01020304050

Bea

ver

Bec

kham

C

addo

Coa

lG

arvi

nH

aske

llK

ingf

ishe

rLe

flore

Linc

oln

Nob

leO

kmul

gee

Pitt

sbur

gPo

ttaw

atom

iSt

ephe

nsTe

xas

Tuls

aNum

ber

of W

ells



01020304050

Cad

do

Has

kell

Leflo

reLi

ncol

n

Loga

nM

cint

osh

Payn

ePi

ttsb

urg

Sem

inol

e

Step

hens

Texa

sTu

lsa

Was

hing

tonN

umbe

r of

Wel

ls



020406080

100120

Bea

ver

Cad

doEl

lisH

arpe

rH

aske

llH

ughe

sJa

ckso

nLa

timer

Leflo

reLi

ncol

nLo

gan

McC

lain

Okl

ahom

aPa

yne

Pitt

sbur

gPo

ttaw

ato

Rog

erM

ills

Texa

sNum

ber

of W

ells



020406080

100120C

oal

Ellis

Has

kell

Hug

hes

Jack

son

Latim

erLe

flore

Linc

oln

Loga

nM

cint

osh

Nob

leO

klah

oma

Payn

ePi

ttsb

urg

Pott

awat

omi

Rog

er M

ills

Sem

inol

eNum

ber

of W

ells

WagonerCherokee Adair

OkmulgeeMuskogeeSequoyah

McIntosh Haskell

Le FlorePittsburgLatimer

PushmatahaAtoka

ChoctawB A S E MA P DA TA IS COP Y RIGHTE D B Y TOB IN INTE RNA TIONA L, LTD., A LL RIGHTS RE S E RV E D.

Location of Hartshorne Producer in Oklahoma

Hartshorne Producer

050

100150200250

Hask

ellHu

ghes

Latim

er

Leflo

reMc

intos

hPit

tsbur

gN

umbe

r of

Wel

ls

Hartshorne Gas Production in Oklahoma

Pittsburg Horizontal Completion

Pittsburg Horizontal Completion

020406080

100120

2000 2001 2002 2003 2004

Num

ber

of W

ells

Leflore Horizontal Completion

Leflore Horizontal Completion

05

101520253035

2000 2001 2002 2003 2004

Num

ber

of W

ells

Haskell Horizontal Completion

Haskell Horizontal Completion

020406080

100120

2000 2001 2002 2003 2004

Num

be r

of W

ells

$0

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

2000 2001 2002 2003 2004

Year

Am

ounr

Ref

unde

dTotal Amount Claimed

Category of wells claimed in Year 2000

Catogories Claimed

01020304050

Inactive Enhancement Deep Well NewDiscovery

Horizontally

Perc

enta

ge

No 3D -Seismic claim for year 2000

Category of wells claimed in Year 2004

Categories Claimed

010203040506070

Inacti

veEn

hanc

emen

t

Deep

New D

iscov

ery3-D

Seism

ic

Horiz

ontal

Perc

enta

ge

010203040506070

Inactiv

eEn

hance

ment

Deep

Well

New D

iscove

ry3-D

Seism

icHo

rizon

tally

Comparison Between Categories claimed in 2000 and 2004

Question/Answers:

OKLAHOMA CORPORATION COMMISSION › PTTC › Case_Studies › CBMconf › Hb_Daneshfar.pdf2000 126...

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