Evergreen Resources testing wells in Mat-Su

Posted: Thursday, September 11, 2003

Although Evergreen Resources is not currently looking for coal bed methane gas on the Kenai Penin-sula, the company's senior executive in Alaska told the Kenai Chamber of Commerce Wednesday that the company does do business with oil and gas industry suppliers here.

John Tanigawa, Alaska projects manager for the Matanuska Valley-based gas company, described his firm's operation in the Cook Inlet Basin and said Evergreen frequently calls on the expertise of industry support companies such as Kenai-based Rain For Rent, an equipment rental company that specializes in water tanks with capacities of 10,000 to 21,000 gallons, scavenge pumps and filtration devices.

Evergreen Resources Alaska, which is a subsidiary of Denver-based Evergreen Resources Inc., is operating on 73,938 acres of leases northwest of Anchorage between Wasilla and Houston, Alaska, according to Tanigawa.

The company is exploring for and producing natural gas from methane that occurs naturally near coal beds.

The production of coal bed methane provides numerous technical challenges, according to Tanigawa.

"Evergreen is known for pioneering in the recovery of coal bed methane," he said.

While people have expressed concern that coal bed methane recovery threatens fresh water supplies from wells, Tanigawa told the Kenai business leaders that all of Evergreen's wells are designed and built to protect fresh water.

"Typically water wells are drilled to 200 to 400 feet. Coal bed methane gas is typically found at 3,000 feet.

"We lower an 8 5/8-inch steel casing and drill an eight-inch hole. The casings are sealed with cement," he said.

Once the well is drilled to coal bed depth, Evergreen lowers what's known as a perforating gun into the hole and hydraulically fractures the coal releasing the gas.

Along with the gas, water is produced from the well and must be disposed of.

"In Alaska, we cannot dispose of production water at the surface," he said. "We hope to dispose of produced water in the same well bore. That's important in Alaska because it saves money."

Tanigawa said operating in the fastest growing area of Alaska presents other challenges because of the proximity of residential areas, but he said typical Evergreen well pads are only 150 feet by 200 feet.

"That's small for the oil and gas industry," he said.

"When we asked our neighbors if they hear us, they said they don't. We asked if they smell us, and they said they don't. And we asked if they see us. They don't."

He showed the Kenai group pictures of three typical Evergreen Resources Inc. production wells in Colorado. Evergreen's well sites were not visible in the photos.

Evergreen's Pioneer Unit, which it acquired from Ocean Energy Resources Inc. and Unocal Alaska in 2001, includes two coal bed methane wells that were drilled in 1999 as well as one water disposal well and one gas-well reentry well.

"In 2002-03, we drilled two pilot wells, one water disposal well and completed five producing wells," Tanigawa said.

He said the company is in the testing phase of the development, and he was not at liberty to disclose any production rates at this time.

During a question-and-answer session following his formal presentation, Tanigawa said not too much data exists regarding the presence of coal bed methane in the southern areas of the Kenai Peninsula, and currently, Ever-green is not active here.

"Right now, we're really busy in Mat-Su," he said.

Asked if Evergreen could come on someone's land and say, "We're going to drill here," Tanigawa told the group that in Alaska, the state owns the mineral rights.

"Legally, can I go in and drill on someone's land yes, it has been done," he said.

"Is it practical? No. Not from a business sense.

"If you upset the people, you can't develop the resource."

He said the company is not putting commercial quantities of methane gas into the pipeline yet, but is testing well flows and venting the gas.

"What we like here is that we have the industry and the people that use natural gas, and we have the pipeline to transport it," Tanigawa said.

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