By OGJ editors
HOUSTON, July 28 -- Husky Energy Inc. and Trident Exploration Corp. extended for two more years a joint venture formed in 2002 to produce gas from coal beds in south-central Alberta.
The extension calls for the drilling of 120 wells during two years in the area between Fenn and Rumsey, Alta., 75 miles northeast of Calgary. The joint venture already produces 6 MMcfd of coalbed methane from 32 connected wells out of more than 50 drilled.
Capital costs will be $40 million, of which Husky will pay 30% to earn a 50% interest in the production.
The agreement covers more than 250 net sections of Husky land upon which Trident will drill at least 40 more wells by yearend 2005 and have the option to drill a minimum of 80 wells in 2005. Trident will manage production, and Husky will operate facilities and transportation and processing infrastructure.
Husky's lands at Fenn Rumsey contain an estimated 500 bcf of gas in place in coals and interbedded sands.
Most wells are drilled to 900-1,000 m, and most gas comes from the Horseshoe Canyon formation (OGJ, Nov. 24, 2003, p. 54). Development entails up to four wells per section with a focus on minimizing surface disturbance. Little water is produced.
Cumulative gas production from 325 wells in the Horseshoe Canyon-Belly River coals was 4.6 bcf as of December 2003, said the Alberta Energy & Utilities Board.
Trident, a private Calgary company, has drilled 192 CBM wells including 72 in the Mannville formation, 94 in Horseshoe Canyon, and 26 in other play types.