Valley gas wells show promise

HOUSTON -- Last week Colorado-based gas driller Evergreen Resources Inc. made its biggest media push in Alaska since it started exploring for coal-bed methane in August with a visit from Evergreen CEO Mark Sexton and an invitation for reporters to visit a drilling site in Houston.

Sexton told reporters that Evergreen might double the amount of natural gas available for the Southcentral Alaska market. The company's target is methane gas inside coal seams that are generally shallower than 2,500 feet underground.

"We know that vast quantities of gas exist in these coal seams," Sexton said. "If we are successful, we'll be able to produce 50 percent of the gas [in the coal beds]."

The company holds 100 percent working interest in about 63,000 acres around Cook Inlet, acquired through deals with the state of Alaska, the Alaska Mental Health Lands Trust and two other energy companies -- UNOCAL and Ocean Energy -- that previously acquired gas rights in the area. Evergreen specializes in coal-bed methane, which industry publications call easy to find but difficult to produce.

Sexton -- who once worked for Amoco -- told reporters that it's not uncommon for large energy companies to fail at coal-bed methane production only to have a smaller specialist such as Evergreen follow in their tracks and succeed.

Evergreen's Alaska Projects Manager John Tanigawa has been in the state for two years and has been making presentations to local community groups and working on permitting with the state of Alaska. Tanigawa said community members often want to know if the gas wells will affect surface water -- such as Loon Lake just north of last Wednesday's media tour-- or affect the water tables that homeowners' wells draw from.

"Shales are impermeable, meaning that you can't flow water through them," Tanigawa said. "There exists several shale zones in between the fresh water aquifers and where we are [prospecting for gas] … The proof is in the pudding. Loon Lake is still unharmed, and nobody's ground water has been effected."

The subsurface layers are made up of gravel, shale and coal, according to Tanigawa, who said the layers alternate but that there is no particular pattern to their sequence. Tanigawa said Evergreen has drilled a water monitoring well with each pilot well cluster.

So far, the company has drilled eight wells in two pilot clusters as was required by the state when Evergreen acquired gas leases. The real answers as to whether or not Evergreen will produce gas at a profit will come next spring when the company completes the exploration wells.

To complete each well, workers will fracture the coal seams by pumping a nitrogen-based foam down the well under pressure. The fractures will extend several hundred feet from the well. Foam is then used to carry sand down the well and fill the fractures so they won't collapse.

Coal-bed methane gas sometimes exists in a deep water table similar to the way carbonation gas exists in beer. A pump placed deep in the well will be used to draw the gas/water mix up the well. Company officials say the wells can't blow out. Wells at Evergreen's successful Raton Basin field in southern Colorado run at pressures as low as 10 psi, according to Sexton.

Evergreen's permits allow the company to drill to 3,000 feet. Sexton may not know for sure if the wells will be profitable yet, but he's excited about the Susitna Valley prospects and the information gleaned so far.

"There's 80 to 150 feet of coal in these wells, which is plenty to work with," Sexton said. " … The potential exists for this to be really big, to double the known reserves."

If Evergreen is successful, the company plans to market the gas locally to Enstar or other utility companies.

Sexton was also one of a group of presenters at who spoke about new prospects for Alaska at the annual conference of the non-profit business organization Resource Development Council for Alaska in Anchorage last week.