Appraisal drilling focuses on Ordos basin coal seams

April 26, 1999
A multiyear pilot and appraisal program is under way to assess the potential of the Hedong coalbed methane prospect in the Ordos basin of China. The targeted coals are of Permo-Carboniferous age, consisting of 10 seams distributed over a 150-200 m interval. Geologic and engineering data acquired from 23 recently drilled wells show good cumulative coal thickness varying from 8 to 20 m, adequate gas content ranging from 12 to 18 cu m/metric ton, and potentially high permeability ( The program
Creties D. Jenkins
ARCO Technology & Operations Services
Plano, Tex.

Charles M. Boyer II
S. A. Holditch & Associates

Roger D. Fisher
Texaco Inc.
Bellaire, Tex.

Brian D. Gobran
Reservoir Technology Consultants
Plano, Tex.

Sheng Jian Bo
ARCO China Inc.

Zhang Shengli
North China Bureau of Petroleum
Zhengzhou, China

A multiyear pilot and appraisal program is under way to assess the potential of the Hedong coalbed methane prospect in the Ordos basin of China.

The targeted coals are of Permo-Carboniferous age, consisting of 10 seams distributed over a 150-200 m interval.

Geologic and engineering data acquired from 23 recently drilled wells show good cumulative coal thickness varying from 8 to 20 m, adequate gas content ranging from 12 to 18 cu m/metric ton, and potentially high permeability (<1 to 90 md).

The program will determine whether:

  1. The coals can be dewatered.
  2. Commercial gas rates can be attained.
  3. A large enough area can be proven for commercial development.


ARCO Exploration & Production Technology Co., Texaco Exploration & Production Technology Co., and China United Coalbed Methane Corp. (Cucbm) are currently assessing the coalbed methane potential of the Hedong Prospect.

The prospect is located about 600 km southwest of Beijing along the eastern edge of the Ordos basin (Fig. 1) [166,839 bytes]. As in any coalbed methane (CBM) project, the key parameters for obtaining sustained gas rates include sufficient coal thickness, gas content, and permeability.

It is also critical to demonstrate that the seams are saturated with gas at reservoir conditions and that reservoir pressure can be quickly lowered through the dewatering process.

This article summarizes what has been learned to date with recommendations for additional technical work.


Mining companies have been extracting coal from the eastern edge of the Ordos basin for several decades. Their exploration drilling programs, which began in the 1950s, confirmed the existence of thick, gassy coals over a large area.

This work led Enron Oil & Gas International Inc. to drill two coreholes in 1993, providing evidence of acceptable coal thickness and gas content favorable for a CBM development program. That same year, the Hedong Prospect was chosen as the area with the best potential in China.1

This led to the establishment of the Liulin pilot project, a cooperative venture between the Chinese government and the United Nations. This project, extending from 1993 to 1996, included seven wells that averaged 1,000-3,000 cu m of gas/day, with a peak of 7,000 cu m/day in one well.

Coincident with the Liulin pilot, Enron drilled seven additional wells from late 1993 to 1995. The company encountered continuous coals with good gas content and a large range of well test data. Several wells were cavitated and placed on production, resulting in water rates of 50-190 cu m/day.

ARCO joined Enron as a partner in early 1997 to continue the appraisal work. In mid-1997, ARCO purchased Enron's interest followed by the signing of production-sharing contracts (PSC) with Cucbm in mid-1998.

These PSCs divide the Hedong prospect into three blocks-San Jiao Bei, San Jiao, and Shilou-totaling 5,000 square km (Fig. 1). ARCO drilled four appraisal wells in the Shilou block in late 1997. Texaco joined the project in 1998, participating in four pilot wells drilled in the San Jiao block. The appraisal wells were completed in autumn 1998 and the pilot wells will be completed in spring 1999.


The Hedong CBM prospect is on the eastern flank of the Ordos basin between a series of north-south trending coal outcrops and the Yellow River.

The Ordos basin is an asymmetric cratonic basin covering an area of about 250,000 sq km. It consists of a thrusted western margin and a gently dipping eastern limb (Fig. 2) [58,471 bytes]. The basin is floored by a metamorphic basement and contains 4-18 km of overlying sediment.

The strata in the Hedong area gently dip westward at 5 to 10° into the basin (Fig. 3) [109,808 bytes]. Superimposed on this regional dip is a westward-plunging anticlinal nose and a small east-west trending graben located in the central portion of the field.


The coal seams are contained within the upper Carboniferous Taiyuan and lower Permian Shanxi formations (Fig. 4) [311,292 bytes]. Each well includes up to 10 coal seams distributed over a 150-200 m thick interval. Individual seams range up to 5 m thick, but in some areas where Seams 4 and 5 coalesce, their combined thickness exceeds 9 m.

Cumulative coal thickness ranges from about 8 to 20 m, with the thickest coals located along the Qiushui River in the San Jiao block (Fig. 5) [89,160 bytes]. The coals are underlain by Ordovician carbonates, a prolific source of water that must be avoided in well completions. A wedge of Mesozoic and Tertiary sediments that thicken westward into the basin overlies the coals.

Appraisal techniques

Several geologic and engineering techniques have been applied to the Hedong prospect to better understand the distribution and production potential of the coal seams.

Remote sensing

Reservoir compartmentalization, changes in permeability, and variations in coal depth can be related to the faulting, fracturing, and folding of coal seams. Knowing the location of these structural features improves the ability to spot wells and explain productivity differences between wells. Remote sensing can provide clues to the existence of these features by revealing their surface expression on satellite images.

SPOT (Satellite Pour l'Observation de la Terre) satellite images, which have a 10-m spatial resolution, were spliced together to form a photomosaic of the Hedong area. Next, these were superimposed on a topographic map of the same area, revealing a fabric of northwest-trending linear features likely controlled by faulting and fracturing (Fig. 6) [92,628 bytes].

One of the larger areas containing these linear features is located around SH-5, a well that tested slightly higher permeabilities than nearby wells. An even larger potentially fractured area is located downdip of SH-5 in the Shilou block, where coal depths exceed 1,250 m.

Below this depth, coals are generally too tight for economic gas production. If it can be shown, however, that coal seam permeabilities have been locally enhanced from the effects of fracturing, these deeper deposits may contain better-than-expected gas production potential.


The hydrogeology of a CBM project is significant because it strongly influences reservoir pressure, the degree of gas saturation, and the ability to dewater the coals. Hydrogeologic work can also provide critical insights into the lateral connectivity of coal seams.

A plot of elevation vs. pressure using data from 11 Hedong CBM wells shows that wells in the central part of the prospect fall on a 0.433 psi/ft pressure gradient, indicating they are normally pressured (Fig. 7) [44,820 bytes].

The normal pressure gradient in these wells is related to recharge of the coals along their eastern outcrop. This is confirmed by maps generated from core-hole mining data showing a downdip increase in chlorinity through the San Jiao block.

Three downdip wells-SG-1, SG-2, and SH-2-show a conspicuous departure from a normal pressure gradient. This implies that these wells are hydraulically isolated from the normally pressured wells in the updip portion of the field.

Fig. 7 shows that the SH-2 well is significantly underpressured. This condition is typical of many coal basins and is a natural consequence of basin uplift, erosion, and cooling.3 Unless hydrocarbon overpressuring is preserved or the seams are connected to an elevated recharge area, the coals will likely be underpressured.

Potentiometric surfaces for the coal seams dip basinward, indicating downdip flow potential. This condition reverses itself, however, between the normally pressured SG-3x well and the overpressured SG-2 well. Steepening of the potentiometric surface between these two wells implies hydraulic discontinuity caused by reduced permeability, faulting, facies changes, or coal thinning.

The Hedong prospect lies beneath a rugged area of terraced mountains and narrow river valleys ranging from 700 to 1,400 m above sea level. Along the Qiushui river valley, the coal seam potentiometric surfaces are above ground level, resulting in artesian flow.

Core holes along the river report up to several hundred barrels per day of water production and gas burning with a flame up to 1 m in height. Based on this strong upward flow and a coal thickness of 20 m, this area was chosen for the first five-well pilot in the San Jiao block.

Core analyses

The SH-3 well in the Shilou block of the Hedong area was continuously cored through the Shanxi and Taiyuan formations (Fig. 4). The cores were analyzed to gain insight into the quality and lateral continuity of the coal seams and to determine whether sandstones and carbonates interbedded with the coals are likely to contribute fluids to the wells.

Descriptive work showed that the lower part of the core in SH-3 is composed of carbonates (limestone and dolomite), carbonaceous mudstones, thin sands, and coals. The coals are thick (0.1-4.5 m), vitrinite-rich (45-57%), and high in sulfur content (1.2-4.8%). The environment of deposition was likely a low-energy marine shoreline where peat swamps developed atop mud-filled lagoons.

In the upper part of the core, the carbonates disappear, the sands thicken, and the coal seams become thinner, indicating a higher-energy system. These rocks are interpreted as deltaic deposits that prograded over the underlying shoreline.

These deltaic coals likely originated in peat swamps that grew upon filled inter-distributary bays and spread across foundered deltaic lobes. The coals are thinner (0.1-1.75 m), contain less vitrinite (31-55%), and have a lower sulfur content (0.4-0.6%) than the deeper coals.

The deltaic coals are thinner and less continuous than the lagoonal coals because of the erosive effect of distributary channels. These channels scoured into the coals, depositing sandstones and creating splits in the coal seams.

These coals also contain less vitrinite because periodic distributary flooding carried silt, clays, and oxidized organic material into the adjacent peat swamps. This decreased coal quality, leading to lower gas content and lower permeabilities.

The reduction in coal quality, combined with compartmentalization created by the sandstone splits, will tend to decrease gas rates and recoveries, making it likely that more wells will be needed to effectively deplete the reservoir.

The sandstones cored in the SH-3 well have porosities less than 10% and permeabilities less than 0.1 md (Fig. 8) [27,665 bytes]. As a result, they are unlikely to contribute a large amount of water or gas to the wells. Nevertheless, in areas where these sandstones are fractured or less diagenetically altered, they could contribute substantial fluid volumes.

Carbonates in the SH-3 core show evidence of regularly spaced fractures filled with calcite. There is no evidence from the core that these fractures are open in the subsurface; however, since much of the core was lost during coring operations, intervals with open fractures may not have been sampled. It is clear from visual core descriptions and thin section analysis that the carbonate matrix is tight and unlikely to recharge any open fractures.

About 22 m of the SH-3 core consists of carbonaceous mudstone. These could represent a significant gas source, especially since adjacent mudstones are often hydraulically fractured along with the coals during well completions. Given that some wells contain twice as much carbonaceous shale as coal, we may see substantial gas contributions from these poorer-quality, gas-bearing lithologies.

Coal composition

Coal analyses are critical for determining gas content, the gas saturation state of the coals, gas composition, coal composition, and coal maturity. These are used to understand the gas deliverability potential of the coals and for comparing coal quality from different areas of the reservoir.

Vitrinite reflectance work shows that the coal rank for the Hedong area increases southward from high volatile A bituminous to semianthracite coal. These coals are in the prime gas-generating window and are comparable to the rank of commercial CBM projects in several U.S. basins. The average gas composition from coal desorption is about 96% methane, 3% nitrogen, and 1% carbon dioxide.

Compositionally, the coals contain 30-60% vitrinite, 30-60% inertinite, 0-2% liptinite, and 5-25% ash. In general, the amount of vitrinite is greater in the deeper seams (Seams 6-10) than the shallower seams (Seams 1-5).

A petrographic study of the coals shows that bright, high-vitrinite, low-ash coals in the deeper coal seams have the most closely spaced cleats. In general, well tests show that the deeper seams also have higher permeability, implying that coal composition strongly affects this parameter.

A comparison between gas-content values obtained from desorption data and sorption isotherms in the San Jiao block shows that each coal seam is essentially saturated with gas (Fig. 9) [47,417 bytes]. A similar comparison in the Shilou block shows that the coal seams are undersaturated with gas (Fig. 10) [45,971 bytes]. This implies that the Shilou reservoir will have to be dewatered to a greater extent than the San Jiao reservoir before economic gas volumes can be produced.

The petrographic work also shows that clays dominate the mineral matter in the coals and are most abundant in Coal Seams 4 and 5. The coal samples also contain a fair amount of calcite, siderite, and pyrite as cleat coatings.

Fusain is commonly found on fresh cleat faces, causing a great deal of black water to be produced early in the life of wells. Fortunately, none of the samples showed enough mineralization to significantly reduce the permeability or plug the cleating system of the coals.

Well testing

Well tests in CBM reservoirs are crucial for determining reservoir and completion properties. The most critical of these is permeability, which in turn has a profound effect on the number and spacing of wells.

Field experience and simulation show that reservoirs can be effectively depleted in a timely fashion (less than 20 years) with widely spaced wells (250-320 acres) when absolute permeabilities are tens of millidarcies. Permeabilities of 1-10 md may require two to three times as many wells to attain the same recovery factor over the same time period.

In the Hedong area, a combination of drill-stem tests (DSTs) and injection/falloff (IFOs) tests has been used to analyze the reservoir. Only about one-third of these tests have yielded satisfactory results. Efforts are under way to improve both procedures and tools before testing the San Jiao pilot wells.

Previous work shows that well test permeabilities in the Hedong prospect range from <1 to 90 md. Experience in other CBM reservoirs shows that a permeability range extending over three orders of magnitude is common. The highest permeabilities (> 10 md) are found in the deeper coal seams of the San Jiao block, whereas other areas have coal-seam permeabilities of <1 to 6 md.

Two of the wells (SG-4 and SH-7) showed indications of linear flow, implying a fluid contribution from natural fractures in addition to the cleat system. Well tests on the north and south margins of the drilled area encompassing the SG-1, SG-2, SH-1, and SH-2 wells indicate low permeability. These may not be representative, however, because of low flow rates (probably a result of formation damage) and insufficient test duration.

Well tests conducted on carbonates interbedded with the coals show permeabilities of less than 1 md. This is commensurate with drilling histories of recent CBM wells that have neither lost fluid to these carbonates nor produced water from them during drilling.

Data collected from old mining coreholes, however, suggest that these carbonates flowed large water volumes. This apparent contradiction suggests that the carbonates are locally fractured. If so, they are probably not connected to outcrop recharge, and they may accelerate the dewatering process by draining the underlying and overlying coal seams.

Project status and plans

The four appraisal wells in the Shilou block were drilled to determine variations in reservoir parameters and to demonstrate coal permeability through water production. Because the wells are widely spaced, they are unlikely to depressure the surrounding reservoir, resulting in little gas production.

The Shilou wells were perforated, hydraulically fractured, and placed on production in the fourth quarter of 1998. The combined rate for these four wells as of February 1999 was 2,200 cu m of gas/day (80 Mcfd) and 15 cu m of water/day (95 bw/d). Production from these wells will be monitored throughout 1999, and one of the wells will be chosen to anchor a future five-well pilot.

Pilot project

In Spring 1999, the fifth well of a five-well pilot will be drilled in the San Jiao block, and all five wells will be completed. The wells are closely-spaced (30-acre spacing) to decrease the time needed for reservoir assessment.

The objectives of the pilot are to:

  1. Demonstrate gas productivity by increasing gas rates over time.
  2. Demonstrate the effects of dewatering by decreasing water rates and reservoir pressure over time.
  3. Evaluate and improve completion techniques-hydraulic fracturing and artificial lift.
  4. Assess full-field development issues including well spacings, well patterns, production rates, and costs.
If successful, the five-well pilot will be expanded in four phases of development drilling to demonstrate commercial gas rates (Fig. 11) [41,169 bytes].

The completion, production, and pressure data from the Shilou appraisal wells and San Jiao pilot wells must be combined with the remote sensing, hydrogeology, core description, core analysis, and well-test data to understand well performance.

Specifically, the data will be used to compare wells and determine whether wells producing low fluid volumes are the result of a poor reservoir, a poor completion, or some combination of these. This assessment is absolutely critical for determining whether additional drilling is warranted.

If the pilot results are favorable, additional appraisal wells and pilots will be added in the future to evaluate the entire prospect (see recommendation box.)


The authors acknowledge the work of several ARCO people who made critical contributions to this article, including Mike Crawford, Donna Freyder, Miles Palke, Jimmy Smith, Charles Willis, Chuck Vavra, and Bob Loucks.

In addition, the authors wish to thank Vu Dinh, John Mainwaring, Tom Marshall, and Rusty Riese (Vastar Resources), Bob Lamarre, Joe McHenry, and Will Jones (Texaco), the North China Bureau of Petroleum Geology, Ray Patalski and Ralph Gray (Coal Petrographic Associates), Keith Greaves (Terratek), Charlie Barker (U.S. Geol. Survey), Andrew Scott and Roger Tyler (Texas Bureau of Economic Geology), Scott Stevens (Advanced Resouces International) and Ben Law for sharing their ideas and expertise.


  1. Boyer, C.M. II, "Geologic Evaluation of the Eight Exploration Areas and Site Selection, Geologic Design, and Test Plans for the Exploration/Production Test Wells," Topical Report, United Nations Development Programme, project CPR/91/214/A/01/99, New York City, 1993.
  2. Zhang, S., Chen, X., Li, B., Yuan, D., and Fang, D., "Coal Fracture Studies of the Eastern Margin of the Ordos Basin: Guides for Coalbed Methane Exploration and Development," proceedings of the International Coalbed Methane Symposium, Tuscaloosa, Ala., May 12-17, 1997, pp. 225-33.
  3. Kaiser, W.R., and Ayers, W.B., Jr., "Coalbed methane in the Upper Cretaceous Fruitland formation, San Juan Basin, New Mexico and Colorado," Bulletin 146, New Mexico Bureau of Mines and Mineral Resources, 1994, pp. 187-207.


BASED ON THE STUDIES CONDUCTED TO DATE, A SIGnificant amount of work is still needed to understand the Hedong prospect and to ensure that the data collected are of high quality.

This work includes the following activities:

  • Characterize the lateral extent, degree of fracturing, and matrix heterogeneity of the carbonates interbedded with the coals. If these fractures are connected to the outcrop, they could extend the dewatering period. If they are localized and in stratigraphic contact with the coals, they could shorten the dewatering period.
  • Improve the gas content and isotherm data by conducting more vendor comparisons and obtaining a pressure core from a new well. The current isotherms suggest that the coal seams are gas saturated in the San Jiao block but undersaturated in the Shilou block.
  • Modify the test procedures and locate better quality tools to conduct consistently accurate well tests. The current tests are of low quality because of tool failure, inadequate test length, and an inability to stay below the parting pressure during injection falloff tests.
  • Core and analyze carbonaceous shales to assess their potential gas contribution. Even though they may have low permeability, they are hydraulically fractured along with the coals and may therefore yield significant quantities of gas.
  • Cavitate one or more wells and compare the well performance to cased-hole, hydraulically fractured completions. Previous work by Enron showed that the Hedong coals can be cavitated.
  • Compare the stress orientations and magnitudes obtained from hydraulic fracturing to well tests and well production data to see if these affect cleat permeability.
  • Conduct a petrographic study of coals in the San Jiao area further to understand the relationship of coal lithotypes, maceral composition, cleat spacing, and cleat-filling materials to coal gas content and permeability.
  • Investigate the use of image analysis (FMI, EMI), dipole sonic, or downhole video tools to determine where faults and fractures intersect wellbores. Optimally, this will be done in a cored well.
  • Regionally correlate the contact between the Taiyuan and Shanxi formations to determine whether it represents a sequence boundary. If so, understand the implications of this surface feature. For example, does it cut-out underlying coals? Are coals directly below this surface diagenetically altered?
  • Conduct thermal history modeling to understand the relationship between burial history, coal maturity, gas content, and formation pressures. This work may help explain the rapid changes seen in vitrinite reflectance measurements while indicating whether gas is currently being generated downdip and moving updip into the Hedong area.
  • Continue to look for Shanxi sandstones that are charged with gas generated from the coals. Open-hole logs and mudlogs can provide indications of fractured or higher-permeability sands and DSTs can be used to test their potential.
  • Obtain gas samples and conduct isotopic studies to determine the origin of coalbed gases. Proximity to outcrop recharge and good permeabilities suggest that most Hedong wells contain a secondary biogenic component in addition to thermogenic gas. Downdip, underpressured wells (like SH-2) that are not in hydraulic communication with the outcrop may only contain thermogenic gas.
  • Obtain additional geologic maps, exploration well data, and existing 2D seismic lines to compare with fracture trends interpreted from the remote sensing study.

The Authors

Creties Jenkins is a senior staff geologist with ARCO Technology & Operations Services in Plano, Tex., where he performs technical service work, research, and training in the characterization of sandstone and coal reservoirs. Formerly with Tenneco Oil, he holds a BS in geological engineering and an MS in geology from the South Dakota School of Mines.
Charles M. Boyer II is a senior geologist with S.A. Holditch & Associates in Pittsburgh. With more than 20 years of industry experience, he currently advises domestic and international clients on issues relating to the exploration and development of unconventional gas resources. Before joining Holditch, Boyer was managing director of Dominion Energy Advisors and was a cofounder of Advanced Resources International. Boyer received a BS in geological sciences from Penn State University and completed graduate studies in mining and petroleum engineering at the University of Pittsburgh and Penn State.
Roger Fisher is a senior research geologist for Texaco Inc. in Houston. He has 12 years of international CBM experience in Europe, Australia, and Asia. His current focus is the exploration and development of CBM properties in the Ordos and Huaibei coal basins of China. Fisher holds a BS in petroleum geology from the University of New Mexico and an MS from Fort Hays State University in Kansas.
Brian Gobran is the president of Reservoir Technology Consultants. His company specializes in reservoir log analysis studies and development of intranet systems to deliver well log data in a variety of formats. Gobran has a BS in earth science and BA in mathematics from the University of California at Santa Cruz. He also has MS and PhD degrees in petroleum engineering from Stanford University, Palo Alto, Calif. Gobran worked more than 17 years at ARCO's research center analyzing special core, pressure transient, and reservoir log data.
Jian Bo Sheng is a senior geologist with ARCO China Inc. in Beijing. Before joining ARCO in late 1996, he worked for Amoco Orient Petroleum Co. as a geologist. Since 1994, Sheng has worked on the Hedong area project. Over the last 2 years, he supervised eight CBM wells drilled by ARCO. Sheng holds a BS (1984) in petroleum geology from the Southwest Petroleum Institute, Sichuan Province, China. Zhang Shengli is a vice-director, coalbed methane project manager, and senior geologist in the CBM operation department of the North China Bureau of Petroleum, China National Star Petroleum Corp. He has primarily worked on exploration and development of CBM over the last 10 years. Shengli holds a PhD in sedimentology from the China University of Geoscience in Beijing and a BS in petroleum geology from the Chengdu Science and Technology Institute.

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