An intriguing coalbed-methane (CBM) development is being pushed ahead by small Denver-based independent New Frontier Energy Inc. The company's Slater Dome prospect, in the Sand Wash Basin of south-central Wyoming and northwestern Colorado, now has nine producing wells making 1.1 million cubic feet of gas per day, and six wells undergoing completion or awaiting pipeline tie-in.

Slater Dome was originally drilled in the 1970s and 1980s for Niobrara oil, but its CBM potential was not realized until 1998. In 2001, New Frontier's predecessor acquired a 30% nonoperated interest in the property, which lies in Carbon County, Wyoming, and Moffat County, Colorado. In November 2006, New Frontier became operator of Slater Dome after purchasing interests held by Cedar Ridge LLC. At present, New Frontier has a two-thirds interest in 35,000 acres at Slater Dome.

The company zeroed in on the dome because of its potential in multiple intervals, including Mesaverde coals (Upper and Lower Iles, Williams Fork and Almond) and deeper conventional reservoirs in Cretaceous through Pennsylvanian sediments. In the coal seams, gas contents range from 150 to 600 standard cubic feet per ton, and total thickness from 100 to 125 feet. Proven per-well reserves, for the Lower Iles coal section only, average 1 billion cubic feet (Bcf).

After assuming operations, New Frontier recompleted four of the existing 11 wells and drilled six new ones. It expects to drill another four prior to year-end, and in 2008 it plans 10 to 20 wells. The majority of the wells produce from the Lower Iles coal, which has an aggregate thickness of about 15 feet at depths from 700 to 3,200 feet. A few wells are completed in Williams Fork coals. Iles wells make gas immediately, but Williams Fork coals have to be dewatered; both coals are fracture-stimulated during completion.

New Frontier's development plans include drilling additional Williams Fork wells to begin dewatering that reservoir. It also intends to tap conventional reservoirs on the dome, and will produce these in concert with its CBM wells.

Additionally, the company funded and constructed an 18-mile pipeline to move its Slater Dome gas to Baggs, Wyoming. It holds an 82.7% interest in the limited partnership that owns the pipeline, which was completed in June 2005.

One of New Frontier's major efforts since taking over operations has been controlling costs. It has converted nine production and water-disposal wells to electrical power, added compression and improved water-handling capabilities. "We have cut our lease operating costs 43%," says Paul Laird, president.

The area is a southern extension of the Atlantic Rim CBM play in Carbon County, Wyoming. Fortunately, Slater Dome lies a few miles south of the area covered by the Atlantic Rim environmental impact statement, so the lengthy federal approval process has not held up its development.

New Frontier plans surface discharge for its produced water from the CBM wells, and it will treat about half of the volume to remove solids. "This is ranching country, and we have a good working relationship with the ranchers," says Laird. "They are interested in beneficial use of the produced water."

New Frontier is also building its acreage holdings in the area. It has taken a farm-out on 38,600 acres at Focus Ranch in Routt County, Colorado, southeast of Slater Dome. The previous operator drilled a couple of 9,000-foot tests, but turned its attention elsewhere. New Frontier struck a deal to test several zones in an existing well, Focus Ranch Federal #1-12, to earn a 75% interest in the acreage block.

Furthermore, New Frontier has acquired a 100% interest in 4,800 acres in its Flattops prospect, west of Slater Dome and adjacent to its gathering line. A well drilled there in 1967 tested 147,000 cubic feet per day from Fort Union and Mesaverde, but was plugged and abandoned due to a lack of market access. In 2008, the independent plans a couple of wells to test Fort Union coals.

In its short existence, New Frontier and its partners have invested $36 million in Slater Dome and related prospects, says Les Bates, chief financial officer. "We've moved this from a nonproducing area to one with 12 Bcf in booked reserves and considerable upside potential."