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Coalbed Natural Gas (Methane) Units From the BLM Perspective

Larry Claypool, Federal Onshore Oil and Gas Pooling and Unitization (2006)

Coalbed Natural Gas (CBNG) development activity in the Powder River Basin (PRB), located in northeast Wyoming, started in 1987, and began to significantly accelerate in early 1999. With the benefits that unit agreements provide, agreement applications for the exploration and development of CBNG became necessary. The idea of drilling and producing CBNG under a unit agreement is relatively new. Three exploratory units were approved under the model form of unit agreement for exploratory units for CBNG production in Wyoming in the 1980s. These units had limited success due to a lack of knowledge of CBNG reservoir characteristics and the most effective production methods. This paper discusses the history and design of Wyoming's new CBNG exploratory form of agreement, how this unit form differs from the conventional model exploratory unit form, issues encountered with the new CBNG unit form of agreement from the BLM perspective, and the current status of CBNG units.

History of the Wyoming Version CBNG Unit

Higher gas prices, improved shallow drilling and completion technology, and substantial CBNG reserves estimates in the PRB (25 trillion cubic feet recoverable reserves) made CBNG an economically viable resource in the late 1990s. To put this recoverable reserve estimate in perspective, the U.S. consumes approximately 22.5 trillion cubic feet per year. Currently, t