Great Eastern Energy Corp. Ltd. (GEECL) is taking a chance on coalbed methane (CBM) prospects in energy-deficit India.

The Indian company has devised an exploration and development plan for CBM prospects in its methane-rich Raniganj (South) and Mannargudi blocks and is looking to acquire new CBM assets to consolidate its lead in CBM production in India.

GECL chairman Yogendra Kumar Modi said his company has finalized a plan to drill an additional 200 wells in the methane-producing Raniganj (South) block in Damodar Valley, West Bengal state, and take up an exploration campaign of 80 wells in Mannargudi block in Tamil Nadu's Cauvery basin.

“Work will start (in Mannargudi block) soon after receipt of requisite approvals which will consist of 30 pilot production wells and 50 core holes,” he said.

Raniganj (South) block, spread across 210 sq km (81 sq miles) in the Raniganj coalfield, has original gas-in-place resources of an estimated 68 Bcm (2.4 Tcf). The Mannargudi block is an unexplored area, considered to have original gas-in-place resources of at least 28 Bcm (1 Tcf).

GEECL is looking at acquiring CBM assets to consolidate its lead coal methane production in India. Modi said his company intended to increase its license area by acquiring existing CBM assets and bidding tenders for CBM blocks in India.

The company acquired a 25% stake (with joint operatorship) in Raniganj (North) block located adjacent to its Raniganj (South) from ONGC Ltd. in May 2013. Raniganj (North) block, where operator ONGC has drilled two exploration wells so far, is considered to hold in place CBM resources of about 57 Bcm (2 Tcf).

Focus On Raniganj

The company is focusing on the exploration and development of the Raniganj (South) block with a campaign to drill an additional 200 wells up to 1,200 m (3,937 ft) in depth spanning about 120 to 160 acres.

“We received approval for drilling an additional 200 wells, at a pace of over 40 wells drilled each year, and expanding our logistics operations and pipeline network, which we expect to complete by the fiscal year 2017 (ending March 31, 2018),” GEECL said in a draft red herring prospectus prepared for its initial public offering (IPO) to be launched later this year.

The explorer is awaiting approval from India’s stock market regulator – Securities and Exchange Board of India (SEBI) – to sell the company’s 8.2 million shares through the IPO. It expects to raise about US $55 million from the share sale and utilize a large part of the net proceeds to fund the company’s development plan for CBM fields in India.

GEECL has roped Halliburton Offshore Services Inc. to take up directional drilling and coil tube fracturing in the Raniganj (South) block. The goal of directional drilling is to increase recovery rates and extend the production life at wells in the block, while the goal of coil tube fracturing is to shorten the time required to fracture wells.

Raniganj (South) block has estimated net 1P, 2P, and 3P reserves of 1.3 Bcm (46.9 Bcf), 3.4 Bcm (121.8 Bcf), and 6.9 Bcm (242.2 Bcf), respectively, as of Feb. 28, 2013, according to a resource and reserve assessment report.

The CBM block covers an area of 210 sq km (81 sq miles) in the Raniganj coalfield, which is located in an industrial belt near Asansol, West Bengal, approximately 200 km (124 miles) north of Kolkata, the capital of West Bengal. The operator has explored about 77 sq km (30 sq miles) of the allocated area so far.

GEECL also is preparing to build additional gas-gathering stations and pipelines to supply the produced gas to consumers. This will include laying 15 km (9 miles) of pipeline from Bamunara to Panagarh and pipeline to the large consumers Jamuria industrial area.

The operator currently produces about 21 MMscf/d of methane from Raniganj (South) block, supplying gas to industrial and retail consumers in the Asansol-Raniganj-Durgapur industrial belt in West Bengal state through its 229-km (142-mile) pipeline network. It drilled 153 wells in the block and built two gas-gathering stations, one central gathering station and seven CNG dispenser outlets.

“We are permitted to operate the Raniganj (South) block until 2036 and believe that this exploration and development plan will allow us to maximize the amount of CBM that we produce and sell,” the company said. It owns 100% participating interest in Ranihganj (South) block awarded in 2010 by the Indian government.

The explorer aims to produce CBM of 100 MMscf/d from Raniganj (South) block by early 2018.

Plans For Mannargudi

GEECL is awaiting approval from regulatory authorities, including the Tamil Nadu state government, to launch a drilling campaign in Mannagudui block in southern India.

According to the plan, the operator would drill 50 core holes and two test wells in the first phase and 30 test wells in the second phase to assess the quantity of recoverable methane resources in the unexplored Mannargudi block in Cauvery Delta, Tamil Nadu. It has identified drilling locations for 38 core holes in Thanjavur and 12 in Thiruvur district as part of the first phase exploration program.

The Indian government awarded the Mannargudi block in the fourth round of CBM block bidding in June 2010. The exploration permit allows the company to carry out exploration, pilot assessment, and market assessment till 2016, and production and development until 2046.

India’s upstream regulator, Directorate General of Hydrocarbons, estimates that the Mannargudi block, which is spread across an area of 667 sq km (258 sq miles) in Mannargudi lignite field in Thanjavur and Thiruvarur districts, is estimated hold in-place methane resources of more than 28 Bcm (1 Tcf).

This block forms part of the lignite basin in the coastal tracts of Tamil Nadu, and Pondicherry in the Cauvery basin. The linear lignite belt extends from Bahur in Pondicherry through the Neyveli Lignite Mines to Srimushnam Jayamkondacholapuram and to the Mannargudi area farther south. The lignite belt has been explored systematically through core hole drilling by various agencies, which proved the occurrence of thick lignite seams of tertiary age at a relatively shallow depth.

The lignite resources in Mannargudi are believed to be in an area of more than 760 sq km (293 sq miles) with presence of seams at a variable depth of 150 m (492 ft) to 500 m (1,640 ft).