Geological Risk Assessment of Coalbed Methane Prospects

Moore, Thomas R.
Illinois State Geological Survey, Champaign, IL

The chance of a coalbed methane (CBM) prospect’s geological success (Pg) depends on risk factors distinctly different from those typically considered for a conventional oil and gas prospect. Because a stand-alone reconnaissance well will not be able to effectively dewater a coal seam, it cannot test a CBM prospect’s success criterion—its ability to produce a sustained flow of desorbed gas. That comes only with a multi-well pilot test, which fills the same role as a conventional exploration well, determining geological success or failure. Also, in contrast with conventional oil, a CBM discovery’s commercial success (Pc) will depend more heavily on deliverability rate than reserve volume. A CBM risk assessment scheme, then, needs to be different than that commonly applied to conventional prospects, but at the same time it must be equitably parallel so that a mixed portfolio of conventional and CBM prospects can be fairly judged on a risked value basis.

A CBM prospect evaluation scheme of discrete screening, reconnaissance, pilot, and appraisal phases can allow one to successively build understanding of a prospect’s potential risks and rewards while staging the expenditure of resources. Such a phased process provides multiple decision points at which both the risk and the value of a prospect should be re-examined before committing to the next step of increasingly greater expense. The net result is to help one to better understand and perhaps mitigate the geological and commercial risks in a CBM exploration venture.

AAPG Search and Discovery Article #90031©2004 AAPG Eastern Section Meeting, Columbus, Ohio, October 3-5, 2004