In a previous coal-metal (CBM) interview, CBM analyst Sprott Asset Management Eric Nuttoll told us that he will remain “very excited about the prospects for companies with coalbed methane reserves if natural gas prices remain above $ 6 per Mcf ( thousand) cubic feet.) The economy will be very skinny up to 6 dollars. “This is because the exploration and development of CBM can become expensive. What if there was a drilling company that regularly transported gas from the ground for $ 1.50 per ton? There are and they proved it with over 250 wells in Australia. They moved to India, where they drilled another 30-50 wells and another 70 wells. Mitchell took up space in southern Kansas, where the company had just completed its first MD. And the company has set up a joint venture with Pacific Asia China Energy (TSX: PCE) to bring Dymaxion® technology to China this year.
You cannot become Australia’s largest private drilling company without thinking about how your markets are right. The excellent temporary ability of the Mitchell family began in 1969, when company founder Peter Mitchell bought his first drilling rig for selling real estate for $ 11,500. Parts of Queensland, Australia, were in real hands. Mitchell put his plant to good use when he began drilling wells for farmers in the surrounding rural districts. Once it was over, Mitchell caught a boom in the coals. His growing company began drilling in shale and coal fields around Moranbah, then in a remote part of Queensland. Then they reinforced the drilling boom in mineral resources in the 1980s. By that time, the company was drilling for oil, gas, uranium, and coal reserves through Australia. In the 1990s, Mitchell Drilling first mastered coalbed methane exploration (CBM) in Australia. It was then that the largest US oil companies, such as Amoco, Conoco, and others, arrived in a country that is looking for new CBM fields.
But large US oil companies abandoned CBM in Australia because they soon discovered that Australia’s low coal deposits are too expensive for their large oil installations. “The economy just didn't work,” Nathan Mitchell told StockInterview. “They needed a high gas flow, but the framing technique simply did not give them what they needed.” Nevertheless, they suspected and asked Mitchell Srilling to launch their smaller rigs for water. “That was the beginning,” Mitchell recalled. "We worked with CBM with water purification plants from an economic point of view, but they still did not release enough gas." However, the economy of a small installation made it work to a certain extent.
Enter the politicians. “The Queensland government has passed a law according to which five percent of all coal-fired power plants must be gas-controlled,” Mitchell explained. "It spawned the industry, and the CBM really took off." Mitchell continued to work with vertical drilling rigs, but it was the savings on a smaller installation that allowed CBM to work.
GETTING BLOOD FROM STONE
It was during the CBM boom when Mitchell developed the best mousetrap. Coal miners did not see how gas resource inferior to their feet. “They just saw them as coal fields,” said Mitchell, who knew that there was “unpleasant gas”. "It was not even thought that there was enough gas to make it viable." With the sale of natural gas for $ 2 / mcf in Australia, the economy did not make sense. Australian coal seams are at lower levels where high pressures are created to release gas from long horizontal seams. Australian one-two strikes of a small coal seam and low gas prices forced Mitchell to become innovative.
“We have not seen horizontal wells and degassing in the coal business of underground drilling,” Mitchell explained. "But, as a rule, there was a lot of water, and there is no way to get the water out." Due to the company's many years of experience in the drilling of water wells, Mitchell combined a vertical well with a horizontal well. Mitchell described this process: "A vertical well made the pipeline for the coal mine, gas and water and banished a huge surface area or up to 2 million per day from these Dymaxion® wells."
The technology has been tested in central Queensland, Australia. An Australian newspaper reported in June 2004: “In an industry where tradition plays a strong role, innovative drillers Mitchell Drilling signed the 100th example of their revolutionary Dymaxion surface to a drain hole for methane gas in the seam (SIS) for gas producer CH4 Limited on its gas project in Moranbach. " CH4 highly appreciated this gas project: “The Gas Moranbah project will use innovative methods for drilling and gas production, which will increase potential gas production, leaving an intact coal resource.”
How does this affect the industry? “We think this is revolutionary,” Mitchell said cheerfully. “This has changed the face of CBM. It works in areas where people did not think it would work. ” For example, Dymaxion® drilling works with high permeability with low gas. “We can get such high gas from tanks with a low gas content, where people have never thought that there are tanks.”
He worked in Australia, where every penny is calculated. "Our price may be about $ 1.25 or $ 1.10 (US dollars) per mcf, so they still get a reasonable profit of about 50 percent." How will he play outside of Australia? Mitchell fired back: "If you can imagine the cost of $ 1.25, and you sell it for $ 6 / mcf, this is a good bloody profit." “We strive to use this technology worldwide,” said Mitchell.
USING BOTH VERTICAL AND HORIZONTAL WELLS
When discussing Dymaxion® technology with a man with oil and gas, his puzzled response was: “I heard that you are right? Do you use both vertical and horizontal wells to get gas? ”There are skeptics. “Contractors from larger oil and gas companies have come to see,” said Mitchell. "Some people thought we were slipping away because of any buying costs." He explained the procedure: “We must intercept (vertical) because we are actually building each of our side wells with a rubberized insert, a perforated insert, so we know that we have intercepted it.”
Mitchell said that the key is the ability to hide and know that the finds are coming out. “We can have many wells that go from one point to another,” he explained, “and we have a continuity of communication and flow between one well, which is 1000–2000 meters, and a vertical well. both. "He gave an example:" We can have three horizontals going in one vertical, and two horizontals can be closed. Number one can open and turn red, and then number two can be open, red and closed. for 10-20 years of a well’s life. ”
How is the SIS gas fission hole larger than the horizontal? “When we put two wells in a chevron pattern, you start to get absorption between V at the beginning of the well,” said Mitchell, describing the Dymaxion process. "As soon as you get wells, in V with each other, you will begin to get better flows, a little more gas and increase the gas in a slow decline."
The Mitchell website admits that old technologies may be suitable for deeper drilling: “In the case of very deep sediments up to 3000 meters deep, a vertical well may be sufficient to create enough wastewater pressure to release methane gas. Due to the larger surface area dumping underground gas in coal seams, the same website quickly points out: “SIS drilling also provides valuable exploration data about seams and fracture seams, which gives greater confidence in the planning and development of mines.”
The SIS process begins with the use of modified multipurpose drilling rigs with specially designed hole assemblies. In the SIS technique, a hole is drilled 60-90 degrees from the surface. It is then guided through a bend of medium radius to horizontally fall into the target coal seam. The 96 mm hole is driven by a seam with respect to a previously drilled vertical production well. The homing device descends down the vertical well to the target seam, which helps the horizontal hole to cross the production well. A vertical well dewaters the seam. As soon as the hydrostatic head has been properly lowered, gas flows to the surface.
MIN. EXTENSION
Developing Dymaxion® technology in the late 1990s, the first test was conducted in Australia in 2000. Now, after almost seven years, the company drilled more than 250 wells in Australia, another 30-50 wells in India, another 70 more to develop, and moved to Kansas and China. Mitchell said about Kansas: “We finished our first well, but we really don’t want to be a contractor in the United States, some kind of action or partnership with clients.” He believes in the right areas that Mitchell received "exceptionally well."
So where did Mitchell first make a stock deal? “Two major energy sources of the world for the future are China and India,” he noted. "Both of them will have energy problems in the future." The first acquisition of Mitchell shares occurred with Pacific Asia China Energy. “We just struck them with what was happening in Australia,” Mitchell laughed, “to see this small compact borehole with holes in the well for 2000 meters and get the gas to work for $ 2.” He explained that while cheaper cars were cheaper in China, logistics, the cost of roads and access to trucks and pumps, equipment and equipment, costs start to rise. ” Like the US aircraft carrier Mitchell compared to the drilling operator, you have 40 decks on deck, but this requires 70 people to launch it. ” Even in China, costs can increase when managing this logistics. includes a reduction in drilling costs and a 50/50 revenue agreement with Dymaxion® technology in China.
How does Mitchell see business growth in China? "Exponentially," he answered quickly. “In China, there is an impetus for the decontamination of their mines. There are several thousand large mines, many of which contain more than one hundred million tons in reserves, and many mines are closed due to degassing problems. ” In an earlier interview with Tunaye Sai, President of Pacific Asia China Energy, he reported that every coal company at the recent symposium approached both Mitchell and Dymaxion technology for China. It's true? “Very,” Mitchell confirmed. “Safety in the mines is now at the forefront of China and international surveillance. They are looking forward to international assistance and technology to come to China and solve these problems. They look at them from them, and they want to sell coal, but they also want to sell gas. It worked well in Queensland and will be applied in China. That is why we see such growth for Mitchell. ”
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