A NEW APPROACH TO COALBED METHANE EXPLORATION IN THE UPPER SILESIAN COAL BASIN

Jerzy Hadro
EurEnergy Resources Poland Al. Jerozolimskie 30 00-024 Warszawa
Eurenergy Resources Corporation 1755 Wittington Place, Suite 340 Dallas, Texas 75234

PRESENTATION OVERVIEW
History of CBM operations in the USCB
Exploration technology Results of drilling and testing operations Causes of failure

New CBM activities in the USCB EurEnergy exploration program New drilling and completion technology
Horizontal, multilateral drilling Under-balanced drilling Completion technology

Application of new technology to the USCB

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HISTORY OF CBM OPERATIONS IN THE UPPER SILESIAN COAL BASIN

The interest in CBM started in the early 90s Huge coal resource and high mine emissions attracted the attention of foreign investors CBM concessions were granted in the years 1991 1997 4 concession holders actually performed drilling and testing operations with the intention of commercial development of CBM resources
Pol-Tex Methane (1991-1996) Amoco (1994-1997) Metanel (1995-1996) Texaco (1997-1998)
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KRUPISKI

Amoco

Metanel

Pol-Tex/Texaco

CBM EXPLORATION TECHNOLOGY

Drilling and production testing using vertical wells:
Single well production testing Amoco, Metanel Five spot production pilot Texaco

Typical completion method: multiple seam stimulation

TYPICAL WELLBORE SCHEMATIC

13-3/8 casing

9-5/8 casing

7 casing TD

RESULTS OF DRILLING AND TESTING OPERATIONS

None of the concession operators was able to establish commercial production After 1998 there was no interest in CBM New CBM concession applications were not filed for several years to come

CAUSES OF FAILURE
Low permeability reservoir (<2mD) Stress-sensitive permeability reducing fracture conductivity Loss of completion effectiveness with production time due to clogging of perforations by gel or coal fines
McCants C.Y., Spafford S., Stevens S.H. 2001 - Five-spot production pilot on tight spacing: rapid evaluation of a coalbed methane block in the Upper Silesian Coal Basin, Poland, Proc. of the 2001 Intern. Coalbed Methane Symposium, May 2001. Univ. of Alabama, Tuscaloosa
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NEW CBM ACTIVITIES IN THE USCB

After several years of stagnation in CBM activities, new concessions have been granted recently The interest in CBM was revived because of oil price increase as well as new developments in CBM drilling and completion technology In October, 2006 a US based company EurEnergy Resources was awarded a CBM concession in the Main Syncline of the USCB The license area covers 508 km2 and mostly overlaps with the former Amoco and Texaco acreage
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KRUPISKI KRUPISKI

Amoco EurEnergy

Metanel

Pol-Tex/Texaco

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EURENERGY EXPLORATION PROGRAM

Use the latest CBM drilling and completion technology, especially horizontal drilling Identify sweet spots Keep the cost low

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OBJECTIVES OF COAL GAS DRILLING & COMPLETION

By-pass wellbore formation damage More effectively connect the wellbore to the natural fracture system of the coal reservoir Stimulate production and thereby accelerate dewatering (to increase the rate of gas desorption) Widely distribute the near wellbore pressure drop (and reduce fines production)

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CBM DRILLING TECHNOLOGY OVERVIEW

Vertical conventional technology Horizontal/directional new technology Multilateral new technology Under-balanced drilling

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HORIZONTAL MULTI ZONE FIRST TARGET

Surface Casing

Injection annulus Carrier String With Up stock on bottom

Second Target

Intermediate Casing

Return Annulus
First Target

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HORIZONTAL MULTI ZONE SECOND TARGET

Second Target

First Target

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HORIZONTAL DRILLING PATTERNS

Adopted from Marcic N., et al., 2005

Singlelateral

Duallateral

Trilateral

Quadlateral

Pinnate
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ADVANTAGES OF DIRECTIONAL & HORIZONTAL WELLS

Directional drilling - parallel target reservoir Productivity enhancement (as much as 10 to 20 fold higher) Faster de-watering rates (gas to surface sooner) Lower environmental/financial impact Fewer wells per section Fewer gathering systems
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HORIZONTAL CBM WELLS ARE SUCCESSFULLY BEING USED IN USA, CANADA AND AUSTRALIA

Adopted from CDX GAS

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TYPICAL CBM HORIZONTAL RIG IN SAN JUAN BASIN, US

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UNDER-BALANCED DRILLING
Under-balanced (UB) drilling occurs when the pressure of the drilling fluid column is less than the pressure of the formation being drilled UB Drilling has the potential to substantially improve gas / hydrocarbon production. UB drilling is applied to mitigate formation damage UB drilling is used in combination with horizontal drilling best results
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COMPLETION TECHNOLOGY
Horizontal well completion open hole or slotted liner completion Mechanical completion methods Electric Submersible Pump (ESP), Expandable Sand Screen (ESS) Hydraulic fracturing treatments (e.g. acidization, water frac, water frac with proppant, other fluids with proppant) Drilling & completion fluid / rock compatability studies (e.g. swelling clays)
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CBM DEVELOPMENT IN POLAND WILL REQUIRE STATE OF THE ART DRILLING SYSTEMS AND PEOPLE

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TYPICAL DRILLING OPERATIONS

Drilling rigs and under-balanced drilling systems Directional drilling and MWD systems Coring rigs and conventional and wireline retrievable coring systems Continuous technology development and application for the area
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SPECIALIZED EQUIPMENT
Horizontal drilling rigs with top drive/pull down capabilities Coring rigs/coring equipment/tools EM-MWD equipment Downhole drilling motors

Adopted from Lightfoot J., 2007

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NEED HIGHLY TRAINED PROFESSIONALS

Drilling Rig Personnel Directional & EM-MWD Personnel
Coring Personnel

Logistics & Procurement Well Planning Personnel

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ANTICIPATED GEOLOGICAL CHALLANGES FOR HORIZONTAL DRILLING APPLICATION IN THE UPPER SILESIA

Coal continuity problems due to complicated tectonics do seismic to identify faults Borehole stability problem perform borehole stability analysis prior to drilling horizontal wells

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SUMMARY AND CONCLUSIONS

CBM operations using vertical wells with multiple seam completion were not successful in the USCB For several years CBM resource was considered to be uneconomic for commercial development Recent, state-of-the-art drilling and completion technology brought fresh hopes and encouraged companies to acquire CBM concessions in Poland EurEnergy acquired a sizeable acreage in the USCB and is determined to implement new CBM technology in order to demonstrate a commercial value of the project The key to success should be horizontal, multilateral wells combined with UB drilling and completion technology CBM development in Poland will require specialized equipment and highly trained personnel Anticipated geological challenges coal seam continuity and borehole stability problems
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THANK YOU FOR YOUR ATTENTION

QUESTIONS ???
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