Crazy gas fields!

[cowman]

Took in an oil and gas meeting last night where they had a speaker from the Dept. of Energy as well as a couple of surface rights people. The upshot of this meeting was to inform people of what was happening in the unconventional gas area(read that as coalbed methane). In the designated area, which is practically every inch of land south of Edmonton but primarily along the Calgary-Edmonton corrider, the spacing of wells has been lowered to 200 meters. This in effect means there can be 9 wells per quarter...in each zone! There are three main coal gas producing zones, so in theory you could have 27 wells per quarter!
One of the surface rights guys went on to explain that in the designated area there were 3500 and change coalbed wells...in the next few years plans are to drill 50,000 more! Apparently there is more gas in the coalbed than all the conventional gas ever produced in Alberta!
Now think about that? How many wells and pipelines basically renders your property as unsuitable for any kind of developement? How difficult will it be to farm around it?
On the other hand if you get a decent annual rent does it matter? If you could squeeze $2000/well on 27 wells that would be $54,000! And when the day comes(and it will) where the companies have to pay you rent on the pipelines, who knows how much you might get?
They also say these coalbed wells last pretty well for ever so it isn't some short term thing.
For a lot of older farmers this might be the golden retirement package?

[TOM4CWB]

IT might be a nice retirement package but it does sterilize the land for many kinds of development eg: building set backs from pipelines, subdivision potential is certainly compromised etc. In the long run it may be costly vs a money maker if the OLD farmer wants to sell or pass the land on down to family.

[cowman]

Well the fact is the Alberta Government wants this to happen and it is going to happen no matter what! So what can you do? You can't really fight city hall?
I guess the best you can do is try to get the most possible with the least damage!
I've already been informed, by registered mail, that I will be getting 7 wells in 2006! The CBM companies operating in this area have agreed they will do everything in their power to try to build pipelines on a grid system to try and minimize the affect on zoning and developement.
I do have a competent lawyer and he will be handling the paper.

[Horse]

Cowman who is the big players in the CBM fields down there are there any junior companys or is it just the big ones.

[cowman]

Horse: Mostly Encana(formerly PanCanadian...CPR), MGV an American company, and Apache Resources. There are a few small companies sneaking in and picking up a few wells but once drilled they usually are sold to one of the three. In my immediate area MGV is the dominant player having sub leased the coalbed zones from Petrofund NGE.
I have found MGV to be a very tough company to deal with in comparison to the other two.