methane drilling

[bunny]

What can you guys tell me about methane drilling? There's a company that is going to drill on a neighbor of mine (only 1/2 mile away!)on crown land. A pasture lease. Seems there are a couple of other farms they're drilling on in the area as well. They sound shadey to me.

[cowman]

bunney: I have stated before that if you live in Alberta somewhere down the line the coalbed methane boys are going to come knocking. The coalbed is immense and estimates are their is more methane gas in it than all the conventional gas in Alberta...past, present, and future!
Heres the problem: The coalbeds are relatively shallow and low pressure producers. Therefore the methane companys need lots of wells(up to 16 per section now, maybe more later)! In some coalbeds there is a lot of water and that needs to be removed before gas flow can occur. Hopefully this "methane water" would be injected down into deeper formations, as it is sort of salty and toxic.
The Alberta government has thrown out the rule book when it comes to coalbed methane. They don't need to build a proper lease that conforms to environmental standards and they don't have to submit their drilling logs to the government!
Also because these are low volume wells, these companies tend to be really cheap? Example: $1800/acre one time payment and $200/yr. loss of production on pasture land...compared to $2200/ac and $350/ac for a conventional well. Also the methane company uses a smaller lease which is fine but they want a caveat of almost twice the area they are paying you for!
Quite often what they like to do is get that first well right in the middle of the section and they will pay quite well for that lease. Then as they add leases they all branch off from that first well so they don't have to pay for many lease roads! And they like to run the shallow pipelines down these lease roads so they don't have to pay you for that either!
MGV, an American company, is the main methane company and they are not only cheap but not exactly the most honest guys in the world?
I have a MGV methane well on some land I own. About three years now and it has been mostly positive. Had a big struggle getting them to put in a Texas gate as they protested it was too costly! Like I said they are really cheap!
I still have some concerns with these wells for this reason...as the pressurized gas is removed from the coal seam what is to stop the water, from the deep aquifier right above it, from seeping into the coal seam. This would pollute that water forever and it would be lost forever? We won't notice it now, we won't notice it ten years from now, but someday it might be gone forever?
The Klein government can only see the dollar signs and will do everything in their power to get this gas. Their track record is not very good I'm afraid! Take the clearcuts on the eastern slopes of the Rockies for example: not a pretty picture and I suspect it might have a whole lot to do with the erratic weather we've been having?
My best advice to anyone dealing with a methane company is to get a competent oil lawyer and get some safeguards built in...like a guarantee you'll always have good water in your well and a clear understanding that they can't remove any water from the coal seam!
Actually if you go for those two things, you won't be getting a well, because they just won't drill! I guess that tells you something?
Basically in my area that is what has happened. The farmers banded loosely together and got a lawyer to draw up some conditions. MGV basically gave up on the idea of trying to develop this coalbed and moved on to riper easier pickings!
By the way the methane well on my place was done three years ago, before all this took place, and was the original exploration well. They claim it is probably the heaviest producer in Alberta and yet it is only 200,000 CFM which is about one fifth of a decent conventional well around here.

[cowman]

Oh, and by the way, if you are ever dealing on a surface lease(whether conventional or coalbed) you can request that you need to consult a lawyer! A good oil lawyer will send the bill to the oil company and not to you! They are obliged to pay if they go ahead with the deal!