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BP presents infill plan
9/5/2008 By: Carole McWilliams
BP wants to drill up to 256 new coalbed methane wells on 80- acre spacing north of the Ute Line, mostly northwest and east of Bayfield.
Company and La Plata County representatives presented the proposal to resident on Aug. 28 at the fairgrounds. There seemed to be almost as many BP representatives as residents there.
"It's highly unlikely" that all 256 wells will be drilled, BP sub-surface development manager Dave Brucker said.
"This application is part of a bigger development plan that we developed in early 2007." He said. That plan anticipates "a big jump in new wells."
The result, he said, is that, "After a bit of a dip, we expect production to increase and be at or above the current level for the next decade."
County Manager Shawn Nau said the Aug. 28 meeting was intended to get resident comments on what should be included in a memorandum of understanding (MOU) now being negotiated with BP.
"La Plata County has become the model for how this is done" since the county and BP negotiated the first MOU for 80 acre spacing three years ago. Parts of the MOU were incorporated in the infill order approved by the Colorado Oil and Gas Conservation Commission.
Since then several other companies and a second BP area have gone through the process. All were south of the Ute Line. Each MOU was somewhat different, Nau said.
Like the other MOUs, Brucker said it will limit the new development to four well pads per section wherever possible, meaning the new wells will be drilled directionally from existing pads on 160 acre spacing. There will be criteria for exceptions.
Brucker said the MOU also will include provisions to minimize expansion of existing pads, to electrify most sites, to test nearby water wells, and to pay road impact fees to the county.
The proposed infill area stops two and a half miles south of the Fruitland formation outcrop, where the gas-bearing coal formation surfaces.
The outcrop has been tied to historic and new methane seeps, drawdown of outcrop water wells, and underground coal fires. The county and COGCC have set a mile and a half buffer south of the outcrop because of that.
But BP staffer Mike Walcher said the infill plan stops where it does because directional drilling becomes problematic in a shallow formation, not because of outcrop concerns.
The bottom hole target zone is around 1,300 horizontal feet from the drill pad, but in a shallow formation directional drilling might only reach 900 horizontal feet. That eats into the gas reservoir being drained by the existing well.
Brucker indicated BP is waiting for technology that can address that situation.
BP has to prove that it is leaving a lot of gas in the ground without the infill wells. Brucker said wells on 160-acre spacing are recovering 40 to 50 percent of the gas. Wells on 80-acre spacing should increase recovery to 60 to 80 percent, he said.
Brucker said BP has drilled 180 wells so far in the previously approved 80-acre infill areas. Only one of those was done with an exemption to drilling from an existing pad. He expects more exceptions in the new infill areas.
He also advised that as gas pressure drops in the reservoir over the coming years, more and more wells will need artificial lift to get the gas out. Those include the traditional beam pumpjacks and progressive cavity pumps that work with a screw mechanism.
According to BP's display on this, 40 percent of current wells need artificial lift. It's needed more on directional wells than vertical bores. BP expects that 90 percent of directional wells will initially need artificial lift. That increases as the wells age. The industry is seeking better ways to pump directional wells.
BP representative John Larkin said the infill plan doesn't include any new major facilities like compressor stations. BP public affairs representative Curtis Thomas said BP's existing compressor stations can handle the new production.
Another BP representative, Ronnie Rivera, said wellpad equipment needs 3-phase power. LPEA will do that, he said. The upgrade just started for the previous 80-acre infill areas.
Most upgrades or installations should be done in five years, he said. "It's limited by LPEA's ability to extend 3-phase or add new services."
Electric wellpad equipment is quieter than gas-powered – around 70 decibels versus 86 decibels, according to BP's display on this.
Shawn Nau rejected the accusation by some residents that the MOU process puts the county in bed with industry. It's an adversarial process, he said.
"We've learned over the years that negotiating these things in advance generally gets a better result for local residents, that local government does a better job of handling specific locations than state government," Nau said. "We take into account the unique aspects of these developments."
Nau said citizen comments for consideration in the MOU should be sent to the county by Sept. 10 if possible. Send them to Kathleen Murphy at email@example.com. Comments will be reviewed by the county’s oil and gas team.
The county commissioners will hold a public hearing on the MOU before voting on it, Nau said.
BP hopes to go to the COGCC for approval in October, Brucker said. The plan covers 59 square miles. Besides the areas northwest and east of Bayfield, it includes a couple sections west of Ignacio, and several drilling units in the Allison- Arboles area.
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