Coalbed Methane Development in the Western Coalbed Methane Development in the Western Canadian Sedimentary Basin: Canadian Sedimentary Basin:
A Significant Emerging Resource for North A Significant Emerging Resource for North AmericaAmerica
Rocky Mountain Natural Gas 2004Rocky Mountain Natural Gas 2004
The WCSB Supply Challenge
39.6031.107.00Cash Flow from Operations ($billions)
13,60010,7002,700Gas Well Connections
(0.42)0.000.60WCSB Supply Growth (bcf/d/yr)
9920Reserve Life Index (years)
0.230.270.53Initial Productivity/Well (mmcf/d)
3.42.90.8Decline Volume (bcf/d)
16.516.49.8WCSB Production (bcf/d)
20.318.08.0Decline Rate (%)
200320001990
Source: TransCanada Corporation April , 2004
CBM Potential of North America
AppalachianAppalachian
San JuanSan Juan RatonRaton
UintaUinta Powder RiverPowder River
Western Canadian Western Canadian Sedimentary BasinSedimentary Basin
Black WarriorBlack Warrior
PiceancePiceance
Potential Daily ProducingBasins Resources Production Wells
(tcf) (mmcf/d)
WCSB 528 30 - 40 >700 drilledSan Juan 85 ~2,000 >3,600Powder River 39 ~1,000 >11,000Uinta 10 280 >580Raton 10 ~160 >1,100Piceance 99 4 40-50
Potential Daily ProducingBasins Resources Production Wells
(tcf) (mmcf/d)
WCSB 528 30 - 40 >700 drilledSan Juan 85 ~2,000 >3,600Powder River 39 ~1,000 >11,000Uinta 10 280 >580Raton 10 ~160 >1,100Piceance 99 4 40-50
Source: Defiant Energy
Tapping the Potential
TertiaryCretaceousCretaceous-Jurassic
Alberta Plains
115-352 Tcf
Fernie/Elk Valley
19 Tcf
Peace River
60 TcfTotal reserve potential of CBM estimated at 182-553 Tcf in western Canada
Alberta Plains are estimated to contain 115-352 Tcf of CBM
Current recoverable estimates for CBM are 43-130 Tcf
Source: GSC, BC Government
Western Canadian Sedimentary Basin –Schematic Cross Section
Edge of Defor
Paleozoic
Lethbridge
Taber
Pakowki
Upper Mannville CoalsMannville
Coals
Lower
BasalDrumheller
Weaver
Colorado Shale
Lea Park
Nikanassin Fm
McKay
Milk River Formation
med Belt
Ardley CoalWestWest
EastEastScollard Fm
HorseshoeCanyon Fm
Belly RiverGroup
Mannville Group
Fernie GroupKootenay Group
Modified from CSUG NGC Technical Presentation, 03-2004
North American CBM Basins - Comparison
Raton
Fort Union
Ferron
Pottsville
Fruitland
Basin Dependent
Mist Mountain & Gates
Upper Mannville
Scollard
Horseshoe Canyon
Coal bearingformation
Variable1 - 103 – 950 - 12010 – 50
Fresh1 – 2010 – 1435030Raton
Fresh100 - 10002 – 525 – 50Up to 100Powder
Saline10 - 3013 – 18350 – 45025Uinta
Brackish<1010 - 15300 – 40025Black Warrior
Saline20 – 5015 – 20225-35070San Juan
UnknownUnknown5 – 5025 - 250Up to 500*restricted basins – B.C.
VariableVariable10 – 4050 – 35050 – 150WCSBmountains and foothills
Saline0.1 – 103 – 10150 – 35010 – 35Alberta plains deep
Dry1 - 101.5 – 325 - 7515 – 35Alberta plains shallow
Waterquality
Avg. Perm.(md)
(bcf/section)
gas content(scf/ton)
Coal (feet)Basin
Source: Defiant Energy
Coal Distribution and Play Definition
Four distinct CBM play styles in Western Canada each of which has unique geological and reservoir characteristics
Western Canada plains – shallow (Horseshoe Canyon/Scollard)Western Canada plains – deep (Upper Mannville)Cordilleran mountain and foothills (Gates)Restricted Basins - British Columbia
Source: Defiant Energy
Distribution of Major Coal-bearing Areas
Graham IslandCoalfield TelkwaCoalfieldKappan andGroundhogCoalfields
TuyaRiver CoalRiver
B owronR iverHat CreekCoalfieldM erritC oalfieldSimilkameenCoalfieldNanaimoCoalfieldCom oxCoa lfieldSuquashCoalfield
Graham IslandCoalfield TelkwaCoalfieldKappan andGroundhogCoalfields
TuyaRiver CoalRiver
B owronR iverHat CreekCoalfieldM erritC oalfieldSimilkameenCoalfieldNanaimoCoalfieldCom oxCoa lfieldSuquashCoalfield
Graham IslandCoalfield TelkwaCoalfieldKappan andGroundhogCoalfields
TuyaRiver CoalRiver
B owronR iverHat CreekCoalfieldM erritC oalfieldSimilkameenCoalfieldNanaimoCoalfieldCom oxCoa lfieldSuquashCoalfield
Graham IslandCoalfield TelkwaCoalfieldKappan andGroundhogCoalfields
TuyaRiver CoalRiver
B owronR iverHat CreekCoalfieldM erritC oalfieldSimilkameenCoalfieldNanaimoCoalfieldCom oxCoa lfieldSuquashCoalfield
Graham IslandCoalfield TelkwaCoalfieldKappan andGroundhogCoalfields
TuyaRiver CoalRiver
B owronR iverHat CreekCoalfieldM erritC oalfieldSimilkameenCoalfieldNanaimoCoalfieldCom oxCoa lfieldSuquashCoalfield
Graham IslandCoalfield TelkwaCoalfieldKappan andGroundhogCoalfields
TuyaRiver CoalRiver
B owronR iverHat CreekCoalfieldM erritC oalfieldSimilkameenCoalfieldNanaimoCoalfieldCom oxCoa lfieldSuquashCoalfield
Graham IslandCoalfield TelkwaCoalfieldKappan andGroundhogCoalfields
TuyaRiver CoalRiver
B owronR iverHat CreekCoalfieldM erritC oalfieldSimilkameenCoalfieldNanaimoCoalfieldCom oxCoa lfieldSuquashCoalfield
Graham IslandCoalfield TelkwaCoalfieldKappan andGroundhogCoalfields
TuyaRiver CoalRiver
B owronR iverHat CreekCoalfieldM erritC oalfieldSimilkameenCoalfieldNanaimoCoalfieldCom oxCoa lfieldSuquashCoalfield
ReginaRegina
Prince RupertPrince Rupert
VancouverVancouver
KamloopsKamloops
VictoriaVictoria
British ColumbiaBritish Columbia
AlbertaAlberta
SaskatchewanSaskatchewan
Grande PrairieGrande Prairie
FernieFernie
SaskatoonSaskatoon
EdmontonEdmonton
CalgaryCalgary
Source: Defiant Energy
Mannville FormationScollard FormationMountains and Foothills
Horseshoe Canyon Formation
Major Exploration Areas:Alberta Plains Shallow – Scollard Fm
Cum coal thickness Cum coal thickness (metres)(metres)Natural gas content Natural gas content (scf/ton)(scf/ton)Depth range Depth range (metres)(metres)Resource base Resource base (bcf/section)(bcf/section)Total resources Total resources -- GIP GIP (tcf)(tcf)Well costs Well costs ($Cdn)($Cdn)Time to production Time to production (months)(months)Water qualityWater quality
11--20203030--13013000--70070022--882020--4040250,000250,000variablevariablevariablevariable
ScollardScollard
EdmontonEdmonton
CalgaryCalgary
Grande Grande PrairiePrairie
A L B E R T AA L B E R T A
00--3 m3 m33--9 m9 m99--15 m15 m> 15 m> 15 m
Net coalNet coal
Pilot projectsPilot projectsEnerplusEnerplusPenn WestPenn WestBonterraBonterra
CalgaryCalgary
Foothills/MountainsFoothills/Mountains PlainsPlains MajorMajorCoal ZonesCoal Zones
PaskapooPaskapoo
ScollardScollard
Battle/WhitemudBattle/Whitemud
BearpawBearpaw
OldmanOldman
ForemostForemost
Lea ParkLea ParkColorado GpColorado Gp
Mannville GpMannville Gp
Kootenay Gp/Kootenay Gp/NikanassinNikanassin
HorseshoeHorseshoeCanyonCanyon
PaskapooPaskapoo ObedObed
ArdleyArdley
DrumhellerDrumheller
LethbridgeLethbridge
TaberTaber
McKayMcKay
LuscarLuscarMannvilleMannville
KootenayKootenay
Carbon/Carbon/ThompsonThompson
CoalspurCoalspurEntrance CglEntrance Cgl
BrazeauBrazeau
Alberta GpAlberta Gp
GatesGatesMoosebarMoosebar
GladstoneGladstoneCadominCadomin
Terti
ary
Terti
ary
Uppe
r Cre
tace
ous
Uppe
r Cre
tace
ous
Wap
itiW
apiti
Belly
Rive
r Gp
Belly
Rive
r Gp
Lowe
r Cre
tace
ous
Lowe
r Cre
tace
ous
Lusc
ar G
pLu
scar
Gp
Jura
ssic
Jura
ssic
Saun
ders
Gp
Saun
ders
Gp
Source: Defiant Energy
Major Exploration Areas: Alberta Plains shallow - Horseshoe Canyon Fm
EdmontonEdmonton
Cum coal thickness Cum coal thickness (metres)(metres)Natural gas content Natural gas content (scf/ton)(scf/ton)Depth range Depth range (metres)(metres)Resource base Resource base (bcf/section)(bcf/section)Total resources Total resources -- GIP GIP (tcf)(tcf)Well costs Well costs ($Cdn)($Cdn)Time to production Time to production (months)(months)Water qualityWater quality
11--12123030--15015000--80080022--331515--2020250,000250,00000--11drydry
HorseshoeHorseshoe
CalgaryCalgary
Grande Grande PrairiePrairie
A L B E R T AA L B E R T A
00--6 m6 m66--10 m10 m1010--14 m14 m> 14 m> 14 m
Net coalNet coal
CBM fairwayCBM fairway CalgaryCalgary
Foothills/MountainsFoothills/Mountains PlainsPlains MajorMajorCoal ZonesCoal Zones
PaskapooPaskapoo
ScollardScollard
Battle/WhitemudBattle/Whitemud
BearpawBearpaw
OldmanOldman
ForemostForemost
Lea ParkLea ParkColorado GpColorado Gp
Mannville GpMannville Gp
Kootenay Gp/Kootenay Gp/NikanassinNikanassin
HorseshoeHorseshoeCanyonCanyon
PaskapooPaskapoo ObedObed
ArdleyArdley
DrumhellerDrumheller
LethbridgeLethbridge
TaberTaber
McKayMcKay
LuscarLuscarMannvilleMannville
KootenayKootenay
Carbon/Carbon/ThompsonThompson
CoalspurCoalspurEntrance CglEntrance Cgl
BrazeauBrazeau
Alberta GpAlberta Gp
GatesGatesMoosebarMoosebar
GladstoneGladstoneCadominCadomin
Terti
ary
Terti
ary
Uppe
r Cre
tace
ous
Uppe
r Cre
tace
ous
Wap
itiW
apiti
Belly
Rive
r Gp
Belly
Rive
r Gp
Lowe
r Cre
tace
ous
Lowe
r Cre
tace
ous
Lusc
ar G
pLu
scar
Gp
Jura
ssic
Jura
ssic
Saun
ders
Gp
Saun
ders
Gp
Source: Defiant Energy
Major Exploration Areas:Alberta Plains Deep – Upper Mannville Fm
Pilot projectsPilot projectsCentrica / APFCentrica / APFTridentTridentThunderThunderBurlingtonBurlington
Cum coal thickness Cum coal thickness (metres)(metres)Natural gas content Natural gas content (scf/ton)(scf/ton)Depth range Depth range (metres)(metres)Resource base Resource base (bcf/section)(bcf/section)Total resources Total resources -- GIP GIP (tcf)(tcf)Well costs Well costs ($Cdn)($Cdn)Time to production Time to production (months)(months)Water qualityWater quality
11--1212175175--330330800800--2000200055--1212150150--170170750,000750,0001212--1818salinesaline
Upper Upper MannvilleMannville
EdmontonEdmonton
A L B E R T AA L B E R T A
00--2 m2 m22--6 m6 m66--10 m10 m> 10 m> 10 m
Net coalNet coal
CalgaryCalgary
Grande Grande PrairiePrairie
EdmontonEdmonton
Foothills/MountainsFoothills/Mountains PlainsPlains MajorMajorCoal ZonesCoal Zones
PaskapooPaskapoo
ScollardScollard
Battle/WhitemudBattle/Whitemud
BearpawBearpaw
OldmanOldman
ForemostForemost
Lea ParkLea ParkColorado GpColorado Gp
Mannville GpMannville Gp
Kootenay Gp/Kootenay Gp/NikanassinNikanassin
HorseshoeHorseshoeCanyonCanyon
PaskapooPaskapoo ObedObed
ArdleyArdley
DrumhellerDrumheller
LethbridgeLethbridge
TaberTaber
McKayMcKay
LuscarLuscarMannvilleMannville
KootenayKootenay
Carbon/Carbon/ThompsonThompson
CoalspurCoalspurEntrance CglEntrance Cgl
BrazeauBrazeau
Alberta GpAlberta Gp
GatesGatesMoosebarMoosebar
GladstoneGladstoneCadominCadomin
Terti
ary
Terti
ary
Uppe
r Cre
tace
ous
Uppe
r Cre
tace
ous
Wap
itiW
apiti
Belly
Rive
r Gp
Belly
Rive
r Gp
Lowe
r Cre
tace
ous
Lowe
r Cre
tace
ous
Lusc
ar G
pLu
scar
Gp
Jura
ssic
Jura
ssic
Saun
ders
Gp
Saun
ders
Gp
Source: Defiant Energy
Major Exploration Areas: WCSB - Mountains and Foothills
Graham IslandCoalfield TelkwaCoalfield
Kappan andGroundhogCoalfieldsTuyaRiver CoalRiver
B owronR iverHat CreekCoalfieldM erritC oalfieldSimilkameenCoalfieldNanaimoCoalfieldCom oxCoa lfieldSuquashCoalfield
Graham IslandCoalfield TelkwaCoalfield
Kappan andGroundhogCoalfieldsTuyaRiver CoalRiver
B owronR iverHat CreekCoalfieldM erritC oalfieldSimilkameenCoalfieldNanaimoCoalfieldCom oxCoa lfieldSuquashCoalfield
Graham IslandCoalfield TelkwaCoalfield
Kappan andGroundhogCoalfieldsTuyaRiver CoalRiver
B owronR iverHat CreekCoalfieldM erritC oalfieldSimilkameenCoalfieldNanaimoCoalfieldCom oxCoa lfieldSuquashCoalfield
Graham IslandCoalfield TelkwaCoalfield
Kappan andGroundhogCoalfieldsTuyaRiver CoalRiver
B owronR iverHat CreekCoalfieldM erritC oalfieldSimilkameenCoalfieldNanaimoCoalfieldCom oxCoa lfieldSuquashCoalfield
Graham IslandCoalfield TelkwaCoalfield
Kappan andGroundhogCoalfieldsTuyaRiver CoalRiver
B owronR iverHat CreekCoalfieldM erritC oalfieldSimilkameenCoalfieldNanaimoCoalfieldCom oxCoa lfieldSuquashCoalfield
Graham IslandCoalfield TelkwaCoalfield
Kappan andGroundhogCoalfieldsTuyaRiver CoalRiver
B owronR iverHat CreekCoalfieldM erritC oalfieldSimilkameenCoalfieldNanaimoCoalfieldCom oxCoa lfieldSuquashCoalfield
Graham IslandCoalfield TelkwaCoalfield
Kappan andGroundhogCoalfieldsTuyaRiver CoalRiver
B owronR iverHat CreekCoalfieldM erritC oalfieldSimilkameenCoalfieldNanaimoCoalfieldCom oxCoa lfieldSuquashCoalfield
Graham IslandCoalfield TelkwaCoalfield
Kappan andGroundhogCoalfieldsTuyaRiver CoalRiver
B owronR iverHat CreekCoalfieldM erritC oalfieldSimilkameenCoalfieldNanaimoCoalfieldCom oxCoa lfieldSuquashCoalfield
Prince Rupert
Vancouver
Kamloops
Victoria
BRITISHBRITISHCOLUMBIACOLUMBIA
Fernie
Foothills/MountainsFoothills/Mountains PlainsPlains MajorMajorCoal ZonesCoal Zones
PaskapooPaskapoo
ScollardScollard
Battle/WhitemudBattle/Whitemud
BearpawBearpaw
OldmanOldman
ForemostForemost
Lea ParkLea ParkColorado GpColorado Gp
Mannville GpMannville Gp
Kootenay GpKootenay Gp
NikanassinNikanassin
HorseshoeHorseshoeCanyonCanyon
PaskapooPaskapoo ObedObed
ArdleyArdley
DrumhellerDrumheller
LethbridgeLethbridge
TaberTaber
McKayMcKay
LuscarLuscarMannvilleMannville
KootenayKootenay
Carbon/Carbon/ThompsonThompson
CoalspurCoalspurEntrance CglEntrance Cgl
BrazeauBrazeau
Alberta GpAlberta Gp
MoosebarMoosebar
GladstoneGladstoneCadominCadomin
Terti
ary
Terti
ary
Uppe
r Cre
tace
ous
Uppe
r Cre
tace
ous
Wap
itiW
apiti
Belly
Rive
r Gp
Belly
Rive
r Gp
Lowe
r Cre
tace
ous
Lowe
r Cre
tace
ous
Lusc
ar G
pLu
scar
Gp
Jura
ssic
Jura
ssic
Saun
ders
Gp
Saun
ders
Gp
GatesGates
Pilot projectsPilot projects
Cum coal thickness Cum coal thickness (metres)(metres)Natural gas content Natural gas content (scf/ton)(scf/ton)Depth range Depth range (metres)(metres)Resource base Resource base (bcf/section)(bcf/section)Total resourcesTotal resources--GIP GIP (tcf)(tcf)Well costs Well costs ($cdn)($cdn)Time to production Time to production (months)(months)Water qualityWater quality
1515--40405050--35035000--150015001010--4040~ 100~ 100> 800,000> 800,000variablevariablevariablevariable
Source: Defiant Energy
Clear Opportunity
020406080
100120140160
Ard
ley
Car
bon-
Tho
mps
on
Low
erE
dmon
ton
Let
hbri
dge
Tab
er
Mac
kay
Upp
erM
annv
ille
Low
erM
anvi
lle
Res
ourc
es (t
cf)
Source: Sproule
Largest potential exists in the Upper Mannville coals
Alberta Plains In Situ Coalbed Methane Resources By Coal Zone
Critical success factors for Western Canadian CBM play types
Alberta Plains – Horseshoe Canyon Formationlow cost drilling and completion techniqueswell established land base and low royalty structureco-mingling of all coal beds in stratigraphic sectionserendipity of conventional reservoirsexisting low pressure surface infrastructurestrong gas prices
Alberta Plains – Scollard Formationlow cost drilling and completion techniqueswell established land base and low royalty structurecost effective water disposal optionsstrong gas prices
Source: Defiant Energy
Critical success factors for Western Canadian CBM play types
Alberta Plains – Mannville Formationlow cost drilling and completion techniqueswell established land base and low royalty structureserendipity of conventional reservoirseffective dewatering of reservoir through critical mass of production wellsexisting low pressure surface infrastructure
WCSB Foothills and Mountainslow cost drilling and completion techniqueswell established land base and low royalty structurecost effective water disposal optionsapplication of new drilling and completion technology to overcomepermeability and coal fabric barriers (sheared coals)
Source: Defiant Energy
APF Alberta CBM Projects
Calgary
Wood River
Bittern
Doris
Edmonton
5M
Corbett Creek
Hackett
Rowley
APF CBM project areasHorseshoe Canyon FormationBearpaw Formation
Other CBM projects
APF Alberta Upper Mannville CBM Projects
Calgary
Doris
Edmonton
5M
APF CBM project areasHorseshoe Canyon Formation
Corbett Creek Bearpaw Formation
Corbett CBM Project
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
T59
T60
T61
T62
T63
R3W5R4R5R6R7
2.8
2.1
3.7
4.5 4.0
3.0
2.7
3.7
4.5
2.6
2.7 3.4
4.0
3.5
5.5
4.0
6.03.5
5.1
4.3
3.7
3.0
3.43.5
4.0
3.4
3.7 3.4
7.06.0
5.0
3.8
3.8
4.5 6.0
4.5 4.8 5.26.3
5.5
4.85.04.1
4.63.0
3.32.4
3.0
2.2 2.52.0
3.33.0
2.23.6 3.02.7
3.14.3
4.0
5.0 4.93.8
4.0
2.0
1.52.0
3.2
6.0
2.4
3.0
7.6
5.5
2.0
2.0
5.5
2.82.6
2.4
3.34.0
3.5
2.55.6
7.0
3.84.6
4.94.8
6.76.66.7
6.0
5.6
5.6
5.2
5.54.6
4.76.0 5.5
5.2
4.03.4
4.6
5.03.4
3.7
5.04.24.9
5.5
5.1 6.5
6.86.1
5.2
6.8
6.07.1
6.8
2.8
2.2
2.9
4.5
4.13.92.0 3.9
7.5
6.17.35.62.5
5.0 6.3
5.84.02.41.2
2.8
5.2
1.82.8
5.5
1.5 4.3
5.2
0.0
6.0
5.5
5.05.0 4.0
4.5
4.5
3.24.5
4.0 2.7
6.56.0
5.2
5.5 4.6 5.2
4.9
5.24.8
5.0
5.0
5.05.04.3 5.65.0
6.1
5.5 4.6
5.55.0
4.5
5.0
4.5
3.84.5
4.85.2
4.3 3.9
7.2
7.9
8.17.3
6.56.1
7.3
7.9
7.5 7.1
7.5 7.27.6 6.0
5.6
4.5
6.07.87.56.56.5
6.8
5.6
4.87.3 7.7
2.35.8
5.82.8
4.5
2.0 2.0
4.92.1
3.4
2.13.82.83.73.7
3.81.5
2.1
1.51.83.9
3.7 2.5
3.0
4.0
3.1
3.5
3.4
4.04.0
3.04.5
2.4
5.2
3.04.36.3
3.3
4.0
4.8
4.44.0
4.23.53.5
6.1
5.2
5.0 6.5
6.2 6.06.5
5.65.5
5.4
4.4
3.6
4.5
4.03.0
3.6
3.72.5
1.9
3.43.4
2.6 2.91.5
0.5
2.6
2.9
1.73.0
2.8
3.34.7
6.3
5.0 6.06.06.5 4.0
2.5
3.1
6.44.1
3.3
2.5
3.13.0
3.0
1.2
4.53.0
4.1
4.2 4.5
7.35.0
3.4
2.7
5.0
3.0
2.7
4.5
2.4
3.8 4.54.5
4.5
3.0
4.54.54.0
4.6 4.64.5
4.0
3.4
3.0
3.6
3.6
4.2
4.64.9
4.0
3.53.03.5
3.7
4.2
5.2
3.4
1.5 2.1
1
2
2
22
2
2
2
3
3
3
3
3
3
3
3
3
3
3
3
3
4
4
4
4
4
4
4
4
4
4
4
4
4 4
4
4
4
4
4
5
5
5
5
5
5
5
5
5
55
5
6
6
6
6
6
6
6
6
6
7
7
7
DORIS
JUDY CREEK
TIMEAU
VEGA
Cum thickness of Mannville coals depicted.
Light blue is maximum total thickness of coal
Greater Corbett Area
T59
T60
T61APF Upper Mannville Pilot10 Wells (1 disposal well)
Trident-Nexen CBM Project54 Wells (2 disposal wells)
APF Timeu
Trident-Nexen Upper Mannville Pilot
Thunder Upper Mannville Pilot
APF Doris
1 Well
Area of thick Upper Mannville coals
Good permeability indicated
Several Upper Mannville pilot projects underway
Potential 69 bcf of recoverable reserves to APF
T64
T63
T62
Active area for a number of producers
R6 R5 R4 R3W5R7
Corbett Creek
Phase 1: 4 wells, 1 water disposal well
Phase 2: 6 wells
Phase 3: 50 additional locations
Upper Mannville Economics
Reserves: 0.95bcf/well sales gasProductivity:
• six months, 25 mcf/d• 6-12 months, increase to 300 mcf/d• 12-24 months constant
Gas Price:• GLJ October, 2003 Forecast• $5.80, 4.70,4.70, 4.70, 4.75, 4.85/mcf
CDN/mcf (AECO)
Capital Cost: • Well: $600,000 per well• Facility: $150,000 per well
Operating Cost:• $0.50/mcf• $2,500 per well-month
Rat
e (m
cf/d
)
0
50
100
150
200
250
300
2004 2006 2008 2010 2012
Mannville Production Rate Over Time
Payout in 4.1 years
ROR: 30%
F&D: $0.80/mcf
CBM Completion & Water Disposal
Removal of water lowers the pressure within the coal zones allowing the gas to be produced
Volumes that are produced during de-watering are re-injected into approved water disposal zones
Withdrawl, use and disposal of all produced water is regulated by the Province of Alberta. To protect the eco-system, no surface disposal of saline water is permitted
Cost of drilling disposal wells can be allocated across the relevant producing wells
Corbett “Inside” Well
Possible preliminary evidence of increasing gas rate as dewatering proceeds
Time (y ears)2002 200503 04
030
000
3000
6000
9000
1200
015
000
1800
021
000
2400
027
000
Cumulativ e GAS Mcf
075
7.5
1522
.530
37.5
4552
.560
67.5
Calndr-Day Av g GAS Mcf
075
075
150
225
300
375
450
525
600
675
Monthly Hours hrs
015
015
3045
6075
9010
512
013
5
Prdcg-Day Av g WTR BblPrdcg-Day Av g CND [No Data]Prdcg-Day Avg GAS Mcf
Cum GAS 26,304.3 McfCum OIL 0.0 BblCum WTR 39,253.3 Bbl
Data As Of :From:
To:
2004-05 (AB)2002-122004-05
INDIVIDUAL PRODUCTION981405 ET AL CORBETT 16-10-62-6
100/16-10-062-06W5/00
Pumping GasCORBETT (0257)MANN UND (0248098)
Status:Field:Pool:
01 5
01 5
1 20
1 35
1 05
9 07 5
6 04 5
3 0
APF Horseshoe Canyon CBM Projects
Calgary
Wood River
BitternEdmonton
5M
Hackett
Rowley
APF CBM project areasHorseshoe Canyon FormationBearpaw Formation
Rowley (Trochu) Detail
3131 3631 3636
6
31
16
31 36
16
31 36
1
36
616161
s
sc@197
sc@280
sc@264
sc@194sc@185
6.5E logbhnd SC
mst bhnd SC5.7
E/GR log
bhnd SC
E log only
8.17.0
6.6
8.0 6.5
7.4E/GR log
7.0
6.3
6.0
6.5
7.0sc@186
sc@197
sc@188
7.0sc@190
sc@58 NLA
10.0sc@54
sc@192
7.
8.5sc@192
10.5sc@79
8.07m gas ss
7.5s
7.57.0
8.0sc@56
8.5sc@189
11.5sc@98
10.5sc@72
5.0sc@82
8.5
9.5sc@132
7.0sc@114
6.56.0
8.5sc@185 sc@265
7.5
10.0
9.510.7
8.4
9.57.5
sc@200
10.0
8.5EL sc@206
8.5
8.5sc@198
16.5Av 25scf/t
sc@281
7.0
11.5
9.5sc@206
'51 E log
6.5
6.5
7.5
10.3
9.5
8.5SC to 275m8.0
8.05.0EL
9.0
8.5
SC to 291m
6.5
9.0
8.5
E log7.3
8.5SC to 342m
10.0sc@110
11.3sc@193
sc@305
SC @ 302m
E log
4+ sc@266
9.0
12.1
7.0
8.0 7.5
8.1
11.9
13.5
s
sc@197
sc@280
sc@264
sc@194sc@185
6.5E logbhnd SC
mst bhnd SC5.7
E/GR log
bhnd SC
E log only
8.17.0
6.6
8.0 6.5
7.4E/GR log
7.0
6.3
6.0
6.5
7.0sc@186
sc@197
sc@188
7.0sc@190
sc@58 NLA
10.0sc@54
sc@192
7.
8.5sc@192
10.5sc@79
8.07m gas ss
7.5s
7.57.0
8.0sc@56
8.5sc@189
11.5sc@98
10.5sc@72
5.0sc@82
8.5
9.5sc@132
7.0sc@114
6.56.0
8.5sc@185 sc@265
7.5
10.0
9.510.7
8.4
8.57.5
sc@200
10.0
8.5EL sc@206
8.5
8.5sc@198
16.5Av 25scf/t
sc@281
7.0
11.5
9.5sc@206
'51 E log
6.5
6.5
7.5
10.3
9.5
8.5SC to 275m8.0
8.05.0EL
9.0
8.5
SC to 291m
6.5
NLA 200mcf/d
9.0
8.5
E log7.3
8.5SC to 342m
10.0sc@110
11.3sc@193
sc@305
SC @ 302m
E log
4+ sc@266
9.0
12.1
7.0
8.0 7.5
8.17.5
11.9
13.5
7.0sc@114
10.7
8.5
NLA 200mcf/d
7.0sc@114
10.7
8.5
NLA 200mcf/d
8.5
7
7
7
7
7
9
9
9
9
9
9
911
1111
11
13
155.6
2.3182.3
177.1493.9
505.4
34.9307.0276.7
405.1169.8
78.4
74.5
130.183.8
50.1105.6
148.5157.1 30.9 37.2 115.1
130.1
289.3
163.3
505.5
68.069.640.2
49.6 177.4 72.2
455.7433.7123.5
7
7
7
7
7
9
9
9
9
9
9
911
1111
11
13
15
A
A'
BYEMOOR
ROWLEY
RUMSEY
TROCHU
BYEMOOR
RUMSEY
SCOLLARD
TROCHU
Detail of Trochu area showing
Isopach of cumulative Horse Shoe Canyon Coals in meters.
Wells licensed as CBM wells circled in black.
Last month (May-04) average daily gas production in mcf/d.
APF CBM Wells
Trochu (Detail) Cross-Section6-7-33-21W4 6-5-33-21W4 10-29-32-21W4 6-19-32-21W4
350
400
450
500
550
600
650
700
Kbelly_rv
Kbearpaw
350
400
450
500
550
600
650
700
Kbelly_rv
Kbearpaw
350
400
450
500
550
600
650
700
Kbearpaw
Kbelly_rv
350
400
450
500
550
600
650
700
Kbelly_rv
Kbearpaw
+802.7
Kmilk_rvHusky Oil Oprtns Ltd
1982/03/24
100/06-07-033-21W4/00A
+841.4
MbanffHusky Oil Oprtns Ltd
1981/11/19
100/06-05-033-21W4/00
<=2251.5m=>
+833.1
Klea_parkPhil lips Petrl Rsrcs Ltd
1978/08/11
102/10-29-032-21W4/00
<=2817.5m=>
+833.4
MbanffRife Rsrcs Ltd
1989/02/26
100/06-19-032-21W4/00
<=3279.5m=>A'
1:60
0
APF Energy Inc
Cross Section A - A'Rowley CBM Project
Licensed to : APF Energy IncBy : ESR Date : 2004/07/23Scale = 1:600 Datum : Sea Level
Interval : From Kbearpaw to Kbelly_rv
3136
61
mst bhnd SC5.7
E/GR log
bhnd SC
E log only
8.17.0
6.6
8.0 6.5
7.4E/GR log
10.0
9.510.7
10.0
2004/03165.29597.5
2004/03441.5
13902.9
2004/02500.9
27426.0
2004/0340.7
1473.0
2004/03435.9
16522.3
2004/02250.6
14335.9
2004/03374.3
19915.5
mst bhnd SC5.7
E/GR log
bhnd SC
E log only
8.17.0
6.6
8.0 6.5
7.4E/GR log
10.0
9.510.7
10.0
10.710.7
7
9
TROCHUTROCHU
A
A'
T3 2
T3 3
R21 W4R2 21 : 40 55 7
Time (years)2004 2005
030
000
3000
6000
9000
1200
015
000
1800
021
000
2400
027
000
Cumulative GAS Mcf
055
055
110
165
220
275
330
385
440
495
Calndr-Day Avg GAS McfMonthly Hours [No Data]
00.
30.
030.
060.
090.
120.
150.
180.
210.
240.
27
Ratio: WTR/GAS Bbl/MMcfPrdc g-Day Avg CND [No Data]Prdc g-Day Avg GAS [No Data]
Cum GAS 27,425.9 McfCum OIL 0.0 BblCum WTR 4.4 Bbl
Data As Of:From:
To:
2004-04 (AB)2004-022004-04
INDIVIDUAL PRODUCTION981384 TROCHU 7-7-33-21
100/07-07-033-21W4/00
Flowing GasTROCHU (0908)TD UND (0999998)
Status:Field:Pool:
Time (years)2004 2005
010
000
1000
2000
3000
4000
5000
6000
7000
8000
9000
Cumulative GAS Mcf
020
020
4060
8010
012
014
016
018
0
Calndr-Day Av g GAS McfMonthly Hours [No Data]
00.
90.
090.
180.
270.
360.
450.
540.
630.
720.
81
Ratio: WTR/GAS Bbl/MMcfPrdcg-Day Av g CND [No Data]Prdcg-Day Av g GAS [No Data]
Cum GAS 9,597.5 McfCum OIL 0.0 BblCum WTR 4.4 Bbl
Data As Of:From:
To:
2004-04 (AB)2004-032004-04
INDIVIDUAL PRODUCTION981384 TROCHU 2-5-33-21
100/02-05-033-21W4/00
Flowing GasTROCHU (0908)TD UND (0999998)
Status:Field:Pool:
Bearpaw
Belly River
Rowley CBM Well Production
Time (years)2003 200504
080
080
160
240
320
400
480
560
640
720
Cumulative GAS MMcf
070
0 070
014
0 021
0 028
0 035
0 042
0 049
0 056
0 063
0 0
Calndr-Day Avg GAS McfCalndr-Day Avg WTR BblCum GAS 795,534.8 Mcf
Cum OIL 0.0 BblCum WTR 247.2 Bbl
Data As Of:WellCount:
2004-05 (AB)41/95
SELECTED WELLS PRODUCTION 2003-052004-05
From:To:
Time (years)2003 200504
010
0010
020
030
040
050
060
070
080
090
0
Cumulative GAS MMcf
085
0 085
017
0 025
5 034
0 042
5 051
0 059
5 068
0 076
5 0
Calndr-Day Avg GAS McfCalndr-Day Avg WTR BblCum GAS 976,751.6 Mcf
Cum OIL 11,958.9 BblCum WTR 67,137.3 Bbl
Data As Of:WellCount:
2004-05 (AB)67/136
SELECTED WELLS PRODUCTION 1984-032004-05
From:To:
035
035
050
5
315
45
280
40
245
35
210
30
175
25
140
20
105
15
70 10
Trochu – All Trident wells 41 wells averaging 160mcf/d. Press release (7-29-04) reports 6MMCF/D from 32 wells = 188 mcf/d/well.
Trochu - All licensed CBM wells. 67 wells averaging 120 mcf/d
Horseshoe Canyon Economics
Reserves (bcf/well sales gas): • Base 0.180 & Upside 0.265
Productivity (raw): • Base case 125 mcf/d• Upside 190 mcf/d• Decline exponentially
Gas Price:• GLJ July, 2004 Forecast
Capital Cost per well: • Well: Cdn.$292,000• Field: Cdn.$82,500
Operating Cost:• Cdn.$0.60/mcf• Cdn.$1,200 per well-month
Horseshoe Canyon Production Rate Over Time
Rat
e (m
cf/d
)
020406080
100120140160180200
2004 2006 2008 2010 2012
UpsideBase Case
Payout in 2.6 to 1.5 years
ROR: 27% to 71%
F&D: Cdn. $12.47 to $8.47/boe
Wood River CBM Project
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
16
31 36
T39
T40
T41
T42
T43
T44
R21W4R22R23R24R25
7.0
8.5
6.511.0
11.011.5
10.0
6.5
8.5
6.04.66.05.8
6.5
6.5
9.0
5.5
7.0
3.5
5.8
10.5
8.5
10.0
7.5
9.0
7.5
6.512.0
9.0
9.5
10.5
8.5
14.5
11.5
12.0
10.5
11.0
10.012.0
11.5
11.0
9.09.0
11.09.0
8.5
8.510.0
8.5
7.5
8.8
9.5
7.5 10.09.0
9.5
8.5
7.0
8.0
12.0
5.0
8.5
8.010.0
9.5
7.0
6.5
9.5
11.0
10.5
6.0
11.0
11.0
10.5
9.0
8.0
10.09.512.57.5
11.0
9.5
9.511.0
10.0
7.5
8.57.5
10.0
10.08.05.0
3.5
5.5
11.5
13.0 11.0
11.59.58.5
7.56.5
5.5
8.09.0
9.5
6.5
7.5
8.5
8.5
4.56.5
6.57.5
7.0
6.5
6.5
8.09.0
7.5
10.5
9.5
8.0
12.0
8.57.0
7.5
12.0
9.0
8.5
10.0
8.58.0
8.0
7.0
7.59.0
10.5
10.0
8.5
8.5
7.5 6.5
7.0
7.5
8.5 8.0
9.0 10.5
8.5
9.58.0
9.55.5
7.5
8.06.5
10.0
7.5
7.57.5
8.0
8.0
8.5
6.5
6.5
10.0
7.5
8.0
6.5
4.5
7.0
13.0
5.8
7.3
14.0
9.08.5
12.0
9.0
7.0
7.0
5.5
7.5 7.3 8.5
6.7
5.5
7.5
7.0
5
7
7
7
7 7
7
7
7
7
7
7
7
9
9
9
99
9 9
9
9
9
9
9
9
9
9
9
9
11
11
11
11
11
11
11
11
13
19.2
212.8
51.1
7.7
278.1
442.4
376.1
437.0
389.2
237.822.8
151.9166.978.2
54.495.3
22.2
69.4142.5233.8286.1
93.357.1
43.166.9161.8109.0
158.15.7
156.748.8
124.8
212.7
77.5
76.8
168.9
106.8
142.5233.8
93.3 43.1
99.3
24.0
257.7230.0
83.7
56.3
61.6
188.2
175.9
181.0
155.7199.7
8.9298.0262.1
141.596.7
26.2
370.6
49.0
20.3 48.8
43.7
442.4
376.1
155.1
237.8
151.9106.8271.5
286.1
93.357.1
43.1161.8109.0
99.3
24.0
113.5
223.8
99.5
84.8
105.7
177.0145.6
147.9
48.8257.7230.0
222.0
184.6367.3
224.818.0
161.3
272.3
250.5
59.8
157.9
102.5
188.2
61.429.8
117.7 70.1
181.0
155.7199.7
298.0262.1141.5
66.4
ALIX
CHIGWELL N
CHIGWELL
ERSKINE
NEVIS
WETASKIWIN
WO
OD
RIV
ER
Lic CBM wells in black.
Pool Code is Edm Coal in open green circles.
Perf’d in Edm/Bpw in solid green diamonds.
Av. Daily production for last month in mcf/d in red.
Wood River Coal Completions
Time (years)2003 200504
080
080
160
240
320
400
480
560
640
720
Cumulative GAS MMcf
055
0055
011
0016
5022
0027
5033
0038
5044
0049
50
Calndr-Day Avg GAS Mcf
015
1.5
34.
56
7.5
910
.512
13.5
Calndr-Day Avg WTR BblCum GAS 763,732.5 McfCum OIL 0.0 BblCum WTR 913.9 Bbl
Data As Of:WellCount:
2004-05 (AB)39/126
SELECTED WELLS PRODUCTION 2003-072004-05
From:To:
Time (years)2003 200504
020
0020
040
060
080
010
0012
0014
0016
0018
00
Cumulative GAS MMcf
095
0095
019
0028
5038
0047
5057
0066
5076
0085
50
Calndr-Day Avg GAS Mcf
020
24
68
1012
1416
18
Calndr-Day Avg WTR BblCum GAS 1,622,336.1 McfCum OIL 0.0 BblCum WTR 1,215.8 Bbl
Data As Of:WellCount:
2004-05 (AB)54/54
SELECTED WELLS PRODUCTION 2003-082004-05
From:To:
Time (years)2003 200504
055
055
110
165
220
275
330
385
440
495
Cumulative GAS MMcf
035
0035
070
010
5014
0017
5021
0024
5028
0031
50
Calndr-Day Avg GAS Mcf
020
24
68
1012
1416
18
Calndr-Day Avg WTR BblCum GAS 540,285.3 McfCum OIL 0.0 BblCum WTR 1,021.5 Bbl
Data As Of:WellCount:
2004-05 (AB)25/25
SELECTED WELLS PRODUCTION 2003-022004-05
From:To:
39 producing wells licensed as CBM wells. May 2004 total 5360 mcf/d. Average rate per well 137 mcf/d.
54 wells designated as producing from Edmonton Coal undesignated Pool. May 2004 production 8618 mcf/d. 160 mcf/d per well average prod.
25 wells producing from perfed interval Edm Coal to Base Bearpaw. May 2004 production 3343 mcf/d. 133 mcf/d average per well.
Western Canada CBM Drilling Activity:1975 - Present
Num
ber
of w
ells
dri
lled Production (M
mcf/d)
Source: Defiant Energy
8449
97
140
594 600
0
100
200
300
400
500
600
700
Pre 2000 2000 2001 2002 2003 2004 Projected0
25
50
75
100
125
150Number of wells drilled
Daily production
36
100
Predicted CBM Production in Canada
Modified from CSUG NGC Technical Presentation, 03-2004
Year
Ave
rage
Pro
duct
ion
(bcf
/d)
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024
NEB Techno -Vert
TCPL
Current Canadian gas production is ~ 17 Bcf/D
Environmental Responsibility
CBM production can utilize existing infrastructure for both drilling and development purposes
CBM producers must adhere to the same responsible drilling, production and operations regulations as all other producers
APF consults with local stakeholders to address concerns surrounding the perceived impacts of CBM drilling and production
Wells are cased with steel and then cemented to protect all underground water sources during production
Contact Information
Corporate ContactsMartin Hislop, C.E.O.
Steve Cloutier, President Alan MacDonald, Vice President, Finance
Dan Allan, Vice President, Coalbed MethaneChristine Ezinga, Corporate Planning Analyst
DISCLAIMER Certain statements in this material are “forward-looking statements” including outlook on oil and gas prices, royalty rates, operating expenses, estimates of future production, estimated completion dates of construction and development projects, business plans for drilling and exploration, estimated amounts and timing of capital expenditures and anticipated future debt levels. Information concerning reserves contained in this material may also be deemed to be forward-looking statements as such estimates involve the implied assessment that the resources described can be profitably produced in the future. These statements are based on current expectations, estimates and projections that involve a number of risks and uncertainties which could cause actual results to differ from those anticipated by APF Energy Trust and APF Energy Inc. These risks include, but are not limited to: the risks of the oil and gas industry (e.g., operational risks in exploration for; development and production of crude oil and natural gas; risks and uncertainties involving geology of oil and gas deposits; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses; potential delays or changes in plans with respect to exploration or development projects or capital expenditures; and health, safety and environmental risks), risks in conducting foreign operations (e.g., political and fiscal instability in nations where APF Energy does business), the possibility that government policies may change or governmental approvals may be delayed or withheld; and price and exchange rate fluctuations. These and other risks are described in APF Energy’s reports that are on file with Canadian securities regulatory authorities. Any offering of trust units may only being made under a prospectus. Any trust units offered will not be and have not been registered under the United States Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
APF Energy Trust2100, 144 – 4th Avenue S.W. Calgary , Alberta T2P 3N4Internet: www.apfenergy.comE-mail: [email protected] Telephone: (403) 294-1000 Toll Free: (800) 838-9206 Fax: (403) 294-1074