CBM Well Costs

 

Dewatering Coal Bed Methane (CBM) Wells

 

At the end of 2009, coal bed methane remained at the 2008 level of about 9 percent of U.S. dry gas production.  The importance of coal bed methane is expected to continue. 

 

2009 Annual Operating costs for a 10-well coal bed methane lease producing from a depth of 1,000 feet to 2,000 feet.*

(Water handling costs are a major factor in coal bed methane operating costs and partially account for the difference in operating costs.)

Region Cost
Appalachia   $88,600
Black Warrior  $133,000
Powder River  $171,900
   
Average  $131,167

*Source: Energy Information Administration, Office of Oil and Gas

 

Methodology

Leases for coal bed methane were assumed to consist of 10 wells dewatered by the predominant artificial lift method employed in that area.  The production depths and rates were chosen as representative for that area.  The areas studied are Appalachia, Black Warrior Basin (Alabama) and Powder River Basin (Wyoming). 

 

The following table lists the average production depth, per well production rates, and dewatering method used in the study.

Area Depth Dewatering Method Water Bbl/d
Appalachia 2,000 ft Sucker Rod 20
Black Warrior  2,000 ft Sucker Rod 43
Powder River  2,000 ft Submersible  300

 

The costs provided in this report are for representative lease operations with equipment and operating procedures designed by EIA staff engineers.  Costs are estimated for representative 10-well coal bed methane lease dewatering by artificial lift.  The design criteria took into account the predominant methods of operation in each region.  Individual items of equipment were priced by using price lists and by communicating with the manufacturers or suppliers of the items in each region.  The leading supply, service, and contracting companies (active in one or more of the regions) were contacted every year (1976 through 2009) for local June prices for their component of equipment or operating function.  The objective of this process is to acquire prices that are representative for each region.  The annual operating costs measure the change in direct costs incident to the production of oil and gas and exclude changes in indirect costs such as depreciation and ad valorem and severance taxes. 

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