Natural Gas 101
Basic class offered: From Leasing through Production
by Dawn Ballou, Pinedale Online!
October 23, 2007
Ultra Petroleum, Shell and Questar, the three big companies that are involved in natural gas production in the Pinedale Anticline, have been working hard to get information out to the public through field tours and on-going educational sessions. Tonight we attended the first of a series of classes they are offering in basic natural gas “101”. The free class series, “Natural Gas: From leasing through production”, are being held in Pinedale at the Shell building. Each class is being offered twice in a given week. Tonight’s session will be repeated again tomorrow night, Wednesday, October 24, for those who missed it. The companies felt that there was a need to provide some basic background information to help people better understand what the natural gas activity going on in the Pinedale Anticline is all about.
The next sessions will be on “Leasing and Permitting” and “Completions and Production”. Each class is being held at the Shell Building in Pinedale, 205 Entertainment Lane, from 6:00 to 8:00 PM. Participants are asked to pre-register by going online to www.PinedaleSEIS.com or call 1-877-526-1007. The second session is being offered October 29th and 30th and the last session is November 6th or 7th.
Below are some of points that came out of tonight’s Geology/Land & Leasing session:
GEOLOGY (Mark Chapin - Geologist with Shell)
- The Pinedale Anticline in the Upper Green River Basin is approximately 5 miles wide by 30 miles long.
- The Pinedale Anticline contains the second largest gas resource in the United States.
- Production depth for the gas reserve is between approximately 7,000 to 14,000 feet. The deepest well drilled so far in the Pinedale Anticline is approximately 20,000 feet deep.
- The first natural gas was discovered in the Pinedale area in 1939.
- In 1989 there were 20 gas wells in the field, several producing.
- In the 2000s, the combination of a rise in the price of natural gas, and better technology for fracturing and stimulating, made it profitable to begin development and recovery of natural gas in the Pinedale Anticline.
- The Pinedale Anticline has the 4th largest daily production of natural gas in the United States (including Alaska).
- Companies have some 450 square miles of seismic data collected for the Pinedale Anticline area.
- Ground temperatures increase with depth at a rate of approximately 1 degree F for every 100 feet depth. Temperatures at the bottoms of the wells are in the range of 250 degrees F.
- Gas productivity at depths of 20,000 feet or more is still untested. It is unknown if it is economical or productive to recover the gas at those depths at this time.
- Temperatures at the bottom of those very deep wells (20,000 feet range) is 300 to 320 degrees F, requiring special equipment and drill bits to handle the high heat.
- The older rocks that make up the Wind River Range are 10,000 to 12,000 feet plus below the rock of the Pinedale Anticline.
- With “directional drilling” the first horizontal angled drill section might go out 8,000 feet, then the vertical down drilling go 6,000 feet to reach desired gas pocket.
LAND & LEASING: (Tab McGinley - Land Manager with Ultra)
- 75% of all the minerals in Wyoming are owned by the U.S. Government.
- The Pinedale Anticline Project Area (PAPA) is 198,000 acres.
- Federal mineral leases are typically 10 years or as long thereafter as there is production.
- Royalties paid to the mineral owner are typically 12-1/2 % of proceeds of production (1/8). After taxes and royalties, the gas companies typically take home about 75% of the revenue.
- The gas companies pay 100% of the cost of drilling and operating a gas well.
- Effective November 1, 2007, the federal government is going to start taking their royalty payment from the Pinedale Anticline “In Kind”, rather than taking cash money payment, meaning keeping the gas and selling and marketing it themselves however they choose.
- The gas companies sometimes partner with each other on a given gas lease.
- Shell, Ultra and Questar are working together on many aspects of working the Pinedale Anticline. They are competitors, but they are also cooperators, to try and better manage and coordinate their activities and minimize impacts to the land and nearby communities.
- Before drilling can begin, there must first be a lease and a surface use agreement with the surface land owner.
- Well spacing on the Pinedale Anticline is at 40, 20 and some 10-acre spacings.
- Surface use agreements with people who don’t own mineral rights typically do not include a royalty payment off the gas extracted from a well on their land.
- The size of an “average” pad on the Pinedale Anticline is around 10 acres, but some are as big as 18 acres. This size decreases once the well goes into production and can be reduced as much as 50% of surface impact.
- The “5 acre well spacing” the gas companies want is UNDERGROUND spacing, not surface disturbance.
- Only 10% of the Pinedale Anticline resource has been developed to date.
- Jonah Field impact is approximately 50% surface disturbance. The Pinedale Anticline is expected to have approximately 8% surface disturbance (15,000 acres disturbed of the 198,000-acre project area)
- Companies are trying to reuse produced water as much as they can and not use clean, fresh water in their operations. Recycling is up to about 70% now.
- Once a well is capped and no longer in use, it is filled with cement to close it.
- Injection wells, in which waste water is pumped back into the ground, are several thousand feet below surface aquifers. There is a subsurface hard layer of hard rock that separates the injection aquifer layer and prevents mixing with surface aquifers. The injected water is going into aquifers of salt water that are not suitable for consumption. It is not going into potable water aquifers. Injection wells are closely monitored and regulated.
- Ground water monitoring in the Pinedale Anticline has been going on since 2000.