British Columbia's first commercial CBM project on line

GeoMet Inc. and Canada Energy Partners Inc. began deliveries from British Columbia's first commercial coalbed methane project near Hudson's Hope west of Dawson Creek, BC.

By OGJ editors
HOUSTON, Jan. 5 -- GeoMet Inc., Houston, and Canada Energy Partners Inc., Vancouver, BC, began deliveries from British Columbia's first commercial coalbed methane project near Hudson's Hope west of Dawson Creek, BC.

Flow started on Dec. 31, 2008, from eight wells at the Peace River project, and GeoMet plans to book initial proved reserves as of that date.

The companies have drilled 12 production wells and four coreholes to Lower Cretaceous Gething coals that average 52 ft thick with 400 cf/ton across 50,788 acres. More drilling is planned in mid-2009.

GeoMet is operator with 50% interest, and Canada Energy Partners has 50%. Canada Energy Partners said the companies have invested more than $45 million in the project the past 8 years. The project has 315 potential well locations on 160-acre spacing.

Canada Energy Partners said the project's modular, scalable gas treating and compression facilities will be strategic in commercialization of the Moosebar shale, the Montney shale, and other deeper formations. Exploration programs on Moosebar and Montney-Doig formations are under way on the lands covered by the project.

GeoMet said Peace River has thicker coal with higher gas content than its project in Alabama's Cahaba basin. Operating costs are higher in Canada, but it expects a similar return because it pays no severance tax, no royalty for 5-7 years, and then 10% average royalty for the life of project.

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