About CBM

Coalbed methane, or CBM, is nothing more than natural gas that is contained in coal. Its chemical symbol is CH4. Natural gas is often referred to as the cleanest of all the fossil fuels. To learn what that means, click here.

According to the USGS, CBM is stored within coal in four ways: 1) as trapped gas within natural fractures and pore spaces, 2) as adsorbed gas on coal surfaces, 3) as dissolved gas in the coal bed water, and 4) as adsorbed gas within the coal molecules themselves. In each case, water must be removed to reduce the pressure that holds the CBM in place, allowing the gas to be produced.

Because of their large internal surface areas, CBM reservoirs can hold 6-7 times as much gas as a conventional reservoir with an equivalent volume of rock. CBM now accounts for approximately 8% of U.S. gas production. The USGS has estimated that Wyoming's Greater Green River Basin holds a potential CBM resource of 314 Tcf.

The following characteristics differentiate CBM from conventional natural gas discovery and production:

• Number of Wells - More wells are needed to recover CBM than conventional gas.
• Low Geological Risks - Most CBM areas have already been identified, eliminating or greatly reducing the need for expensive geophysical data such as seismic surveys.
• Lower Finding Costs - CBM exists at much shallower depths than conventional gas reserves, greatly reducing drilling costs per well. Industry analysts have estimated that domestic finding costs averaged approximately $4.00 per Mcf in 2008. (Note that our finding costs in the Atlantic Rim CBM projects are expected to be approximately $1.00 per MCF.)
• Lower Processing Costs - CBM usually requires no further processing beyond dehydration and compression, i.e., natural gas liquids such as butane and propane do not have to be removed. CBM is already pipeline quality gas.
• Reserve Lives - CBM wells typically have longer reserve lives than conventional wells.
• Production Rates - Production from CBM wells is usually much lower than production from conventional gas wells. For instance, the 17,000+ CBM wells in Wyoming's Powder River Basin produce a total of 1 Bcf /day, or less than 70 Mcf/d per well.

While such production rates may seem low, it should be noted that the 453,000 U.S. natural gas wells produced an average of 442 Mcf/d in 2007. Of these wells, there are nearly over 296,000 so-called "stripper wells" that produce less than 60 Mcf/d. For comparison, Double Eagle's operated CBM wells averaged 347 Mcf/d in December 2008. Unlike conventional gas wells that are in a constant state of declining production, CBM wells experience increasing production while they are being dewatered.