Coal bed methane (CBM) is perhaps among the final important all-natural gas resources out there in Canada. With the maturing of your Western Canadian Sedimentary Basin, the prospective for elephant sized discoveries has been significantly reduced. Higher all-natural gas rates have also greatly enhanced the economics for CBM exploitation. We at Sprott Asset Management are fairly excited regarding the prospects for businesses with coal bed methane assets so extended as natural gas rates remain above $6 per Mcf (thousand cubic feet). The economics could be pretty skinny below $6.
Effectively in Canada, CBM is known as the oil sands of natural gas. The analogy is that its a very large resource. The Alberta Power and Utilities Board has assigned 71 trillion cubic feet of gas in location for Horseshoe Canyon and 239 Tcf of gas in spot for the Mannville coals. These are pretty huge potential resources. They fit the definition of an unconventional resource: definable in aerial extent, predictable in nature and repeatable. In contrast for the oil sands, which are only found in Alberta, emerging CBM plays exists in several locations from the country, like in Nova Scotia (Stealth Ventures), Southern British Columbia (Storm Cat Exploration), and even in Northern Ontario (Admiral Bay).
StockInterview: Are you able to explain why every person refers to CBM as an unconventional resource, when methane would be the important constituent of conventional all-natural gas
Coal bed methane is known as an unconventional resource, since it requires various procedures and approaches than the exploitation of natural gas from a conventional reservoir. 1 such difference is the should fracture the reservoir, typically employing air or nitrogen, as a result of lower permeability of coal versus a conventional reservoir. This fracing can generally be equal to the price to drill a coalbed methane properly, depending on the amount of coal seams. Also, CBM wells commonly come on at lower rates than conventional wells, yet have a lot of of your exact same fixed fees, in addition to the added costs of fracing and compression penny stock. So it makes sense that in order for the economics to become equal, the CBM well would need a larger all-natural gas cost.
For the past 4 years, Horseshoe Canyon (province of Alberta) has been the primary sector concentrate. Horseshoe Canyon coals are practically normally dry, are relatively shallow, produce sweet gas, and may be drilled with standard drilling rigs. The Horseshoe Canyon Trend is commonly recognized, and exploration risk is pretty minimal. The primary danger will not be whether the coals will contain gas, but rather whether there is sufficient all-natural cleating to allow for an economic rate of gas production.