# Presentation: 173143

## EIA Annual Meeting

**Washington DC**
**April 12, 2005**
**Ed Butler**
**VP Engineering and Planning**
**CDX Gas LLC**

## The Challenges and Solutions to America’s Energy Security

## Challenges to Meeting America’s Demand for Natural Gas

**LNG .............****Costs, NIMBY, Asia, Transportation, Security****	****	**
**Alaska ..............****Costs, NIMBY, Environmental**
**Access ..............****NIMBY,**** ****Environmental**
**Pipelines ..........****Costs, Permitting, Timing, Environmental**
**Permitting .......****Bureaucracy, Personnel, Environmental**
**Steel .................****Lack of manufacturing (Rigs & Pipe), Costs**
**Environment ..****Water, Surface disturbance, Wildlife**
**Exploration .....****Mergers, Lack of risk capital, Geoscientists**
**People ..............****Lack of laborers, Engineers, and Geoscientists**
**Energy Policy .****109****th****Congress? Access, Incentives,Special Ints.**** **
**Technology ...... ****Lack of R&D, Risk Capital, Creative minds**

_***Formidable obstacles, but is there hope?***_

## The Solutions

**Efficiency and Conservation ......****Public Support**
**	**
**Fuel Diversity ......****Gasification, Nuclear, Clean Coal, Renewables**
**Infrastructure ......****Storage Incentives, Pipelines, Rigs**
**People .......****Attract youth, Job Security, and Compensation **
**New Supply ....****LNG, Alaska, Offshore & Onshore permits & access**
**Technology ......****Production, Stimulations, Completions, Processes**
**	****	****    ****Inventions, Fuel Cells, Hydrates**

_***It will take all of this and more !!***_

## The Unconventional Solution

##  Unconventional Reservoirs  (Low Permeability)

**Coalbeds**
**Shales**
**Tight Gas Sands**
**Heavy Oil Sands**
**Fractured Carbonates**

## Largest U.S. onshore gas discoveries in last 25 years

- 	_**Producing**_
**San Juan Basin CBM** (1986)	**2,000 MMcfd**
**Powder River Basin CBM** (1991)	**930 MMcfd**
**Barnett Shale** (1981)	**700 MMcfd**
**Jonah – TGS** (1995) 	**650 MMcfd**
**Pinedale Anticline TGS **(2001)	**220 MMcfd**
**Madden TGS **(1999)	**200 MMcfd**
**REQUIRES** **CUTTING EDGE TECHNOLOGY     **

## Most Active US Drilling Areas

- Source: IHS Energy well data

**Gulf Coast Basin Deep**

**Permian**
**Tight**

**Powder River CBM**

**Black Warrior CBM**

**Anadarko**
**Deep**

**Arkoma**
**CBM**

**Pinedale &**
**Jonah Tight**

**Uinta**
**CBM**

**San Juan**
**CBM**

**Appalachia**
**Deep**

**Barnett**
**Shale**

**Deepwater**
**Discoveries**

**Majority of activity is**
**in Unconventional**
**Reservoirs !**

## Coal Basins

**Coal Basins**

**Tight Sand Plays**

**Shale Gas**

## Drilling Technologies

**Surface Degasification**
** ****Methods**

**Gob Drilling (CMM)**

**Conventional Vertical**
**Drilling**

**Horizontal Drilling**

## Coalmine Methane/ Gob Well

**Coalmine Methane/ Gob Well**

## Vertical Drill and Frac Well

**Vertical Drill and Frac Well**

**Slick Water Frac**
**Typically, 10,000 lbs of Propant per Foot of Coal**
**Horizontal “Pancake” Typical In Shallow Coals**

## Conventional Development 16 locations

**Conventional Development 16 locations**
**(1280 acres)**

## Horizontal Technology 

## 1500’

**1500**’

## Horizontal Development Well

**Horizontal Development Well**

## CDX Technology 

## CDX’s Horizontal Drilling System: The Pinnate Drainage Pattern

**CDX’s Horizontal Drilling System: ****The Pinnate Drainage Pattern**

**Notes:**
The Pinnate approach offers an efficient drilling network and drainage area.  
We begin with the foundation of a Dual Well System.
First, we pre-drill a cavity well.
Then, we drill a series of lateral networks that stem in a branching configuration.
These multiple laterals are termed a “Pinnate” network.  
Origin of term “Pinnate”
These lateral networks can reach 4,800 feet.
(MD of all legs is equal to MD of main leg)

The lateral spacing may be varied as needed depending on time and cost 
(150 foot spacing/6 months or 600 foot/5 years)
For maximum impact, CDX uses a proprietary computer simulation model to predict reservoir results.

## Z-PINNATETM Drilling and Completion System

**One small wellsite**
**Pinnate pattern drains 1,280 acres and replaces 16 standard 80 acre locations**
**360 Degree Drainage Pattern**
**Quicker and Higher Gas Recoveries**
**Uniform Drainage and Pressure Depletion**
**Significant  environmental advantages**
**Patterns expanding to drain over 2,000 acres   (25 to 1 well sites)**

**1 Quad Z-Pinnate****TM Pattern**

**Conventional Wells**

## Understanding the Production Profiles: Rate versus Time Comparison

**Understanding the Production Profiles: *****Rate versus Time Comparison***

## Dual Seam Completion

**Dual Seam Completion**
**Pinnate Development 1 well**
**(1280 acres)**

**The Environmental Solution to Unconventional Gas Development**

## The CDX Footprint...one well site for 1200 acres

**Notes:**
One of the biggest benefits of the CDX horizontal drilling process is the Economies of Scale that can be achieved
From this one site, you see the physical surface footprint of one well that is capable of draining a 1,200 acre network
This results in fewer locations and far less surface disturbance.
Well tenders now can visit one well site versus 15 or 20 using traditional techniques
Plus, the facilities costs for pipelines, compressors and roads is greatly minimized.

## CDX Gas  93 Well Pinnacle Operations, West Virginia 

**CDX Gas  93 Well Pinnacle Operations, West Virginia**

## CDX Gas Technology

**vs.**
**CBM Industry**

## Coalbed Horizontal Drilling Activity

**  ****2005 New Horizontal Basinal Tests**

- Existing Horizontal CBM Wells

## AppalachianCoal Region

**Basins: Black Warrior, Central Appalachian, Northern Appalachian**
**Coal Age: Pennsylvanian**
**Coal Rank: hvA/Bb-lvb, minor semianthracite; anthracite in Pa. Anthr. Fields**
**Typical Gas Content: 250-350scf/t**
**Typical Well Spacing: 80 acres**

**Deeper Coals, Shales, Tight Sands and Carbonates**

## Black Warrior Basin CBM

**Area: 35,000 mi****2**
**Target Coals: Pottsville Fm.**
**Coal Age: Pennsylvanian**
**Coal Rank: hvA/Bb-lvb**
**Typical Gas Content: 350scf/t**
**Producing Wells: ~3,000**
**Typical Well Spacing: 80 acres**
**Operators: 12 (consolidated with maturity)**

**Deeper Coals, Shales, Tight Sands and Deep Carbonates**

## Deeper Coals, Shales, and Tight Sands

**Deeper Coals, Shales, and Tight Sands**

## San Juan Basin CBM

**Area: 7,500 mi****2**
**Target Coals: Fruitland Fm.; Menefee Fm. (untested)**
**Coal Age: Late Cretaceous**
**Coal Rank: hvCb-lvb**
**Typical Gas Content: 430 scf/t**
**Producing Wells: ~3,000**
**Typical Well Spacing: 320 acres, 160 acres (infill)**
**Operators: ~80**

**Deeper Coals, Shales, and Tight Sands**

## Piceance Basin CBM

**Piceance Basin CBM**

**Area: 6,700 mi****2**
**Target Coals: Williams Fork and Iles Fms. (Mesaverde Group)**
**Coal Age: Late Cretaceous **
**Coal Rank: hvCb-lvb, some semianthracite**
**Typical Gas Content: 125-325 scf/t**
**Typical Well Spacing: 80 acres**
**Operators: <10**

## Piceance Basin Coal Rank

**Piceance Basin Coal Rank**

- Adapted from McFall and others (1986)

**Deeper Coals, and Shales**

## Powder River Basin CBM

**Area: 25,800 mi****2**
**Target Coals: Fort Union Fm.**
**Coal Age: Paleocene**
**Coal Rank: subbituminous**
**Typical Gas Content: 30 scf/t**
**Permits: >25,000**
**Producing Wells: ~12,000**
**Typical Well Spacing: 80 acres**
**Operators: ~120**

**Deeper Coals**

## Greater Green River Basin CBM

**Area: 25,800 mi****2**
**Target Coals: Adaville, Rock Springs, Lance, Almond, Williams Fork Fms.; Fort Union Fm.**
**Coal Age: Late Cretaceous; Paleocene (Fort Union)**
**Coal Rank: hvCb-lvb (Cretaceous); subb (Paleocene)**
**Typical Gas Content: 350 scf/t**
**Typical Well Spacing: 160 acres**
**Operators: 13**

**Deeper Coals, Shales, and Tight Sands**

## Uinta Basin CBM

**Area: 14,450 mi****2**
**Target Coals: Ferron Sandstone Mbr. Of Mancos Shale; Blackhawk Fm.**
**Coal Age: Late Cretaceous**
**Coal Rank: hvB/Cb**
**Typical Gas Content: 400 scf/t**
**Producing Wells: ~580**
**Typical Well Spacing: 160 acres**
**Operators: 10**

**Deeper Coals, Shales, and Tight Sands**

## Pacific Coal

**Target Coals: Puget Group**
**Coal Age: Eocene**
**Coal Rank: subC/A-mvb, minor anthracite**

**Pacific Coal**
**    ****Region**

** ****Coals, Shales, and Tight Sands**

## Alaska Coal Region

**Coals, Shales, and Tight Sands**

## Shale Gas Resources

**Wolverine**
**Antrim Shale**

**Illinois Basin**
**New Albany Shale**
**PGC > 5 TCF recoverable**
**86 - 160 TCF Gas-In-Place (NPC)**

**35 - 76 TCF Gas-In-Place **
**(NPC)**

**San Juan Basin**
**Lewis Shale**
**97 TCF Gas-In-Place **
**(Burlington Res. Est.)**

**Fort Worth Basin Barnett Shale**

**27 TCF + 98 mmbngl**
** ****undiscovered resource (USGS)**

**Arkoma Basin**
**Caney / Fayetteville / Woodford Shale**

**Appalachian Basin**
**Devonian Shale**
**225 - 248 TCF Gas-In-Place (USGS/DOE & NPC)**

***America’s Principal Future Source of Natural Gas ?***

## The Future Is Unconventional

***The Future Is Unconventional***