In the early 1980s, CNX Gas was a business unit of Consol Energy, operating primarily in southwest Virginia. Because the Pocahontas #3 coal seam there produced such gaseous coal, Consol’s gas operation was charged with degassing the seam prior to mine-through to improve the mine’s safety and productivity. Not until 2005 did circumstances coalesce and the idea of CNX Gas as a stand-alone company become a reality.

In 2003, management considered the prospect of expanding into northern Appalachia, but it was faced with a unique challenge. While the vertical fracturing technique employed in Virginia worked well in the geology in that state, it proved unsuccessful in northern Appalachia.

“We were pulling gob gas off of the Loveridge and Blacksville #2 coal mines (much like we were at the Buchanan mine in Virginia), but we couldn’t apply the same vertical fracturing technique employed in Virginia due to the geology in northern West Virginia and southwestern Pennsylvania,” says Sam McLaughlin, vice president of Northern Appalachia for CNX Gas. For this reason, Consol engineers began experimenting with horizontal drilling. From 2003 to 2005 they experimented with the design of about nine horizontal wells, attempting different patterns and techniques, no two of which were the same.

Their specific challenge was this: The permeability and cleat system of the Pittsburgh #8 coal seam did not allow for vertical fracing, because the fracture didn’t penetrate the coal seam. Therefore, minimal gas migrated to the production hole. The Pittsburgh #8 seam is sandwiched between very soft shale strata—the fracturing liquid that was pumped in migrated to the softer shale rather than staying in the coal seam. This forced CNX Gas to approach the seam horizontally.

The separation of CNX Gas from Consol was the catalyst for the creation of Mountaineer CBM Operations in northern Appalachia. At this time, a dedicated CNX Gas management team focused on aggressively degassing the more than two billion tons of coal held by Consol in the region. The intent was to provide a “second front” to the already successful Virginia CBM operations. In 2005, Mountaineer started out with five employees and was producing 2.2 million cubic feet per day from the experimental wells.

The original horizontal well design had an access well, which began vertically and turned horizontally to intercept an already-drilled production well. After a successful intercept, drilling would continue with three laterals of roughly 4,000 feet each in a pattern that resembled a turkey foot. The drainage pattern was thought to be 640 acres. The rate of return on a well was also analyzed in meticulous detail because it was now imperative that these wells generate an after-tax rate of return of 15%, assuming gas was priced at $5 per Mcf.

The first rig dedicated to Mountaineer arrived in May 2006. Directional drillers were also interviewed. “We had one directional driller who we thought had the potential to be a very good partner,” says McLaughlin, now general manager, Mountaineer Operations. “Later, we also found out about Scientific Drilling Inc (SDI).”

CNX Gas engineers were ensuring that the horizontal wells were oriented to cross the largest number of natural fractures while always drilling up-dip in the coal, in order to have the associated water flow downhill to the production well, where it could be easily removed.

The early wells were being drilled at a 50% intercept rate to the production well. It was taking 24 to 28 days to drill them, which was not acceptable. The company consistently found that after the laterals were drilled past the 3,000-foot mark, problems occurred that ranged from not being able to stay in the seam, to issues involving rate of penetration and steerability.

It was time to try something new, and CNX Gas engineers rose to the occasion with a new well design, dubbed the asymmetrical quad. Instead of drilling three legs 4,000 feet into the coal seam, they would shorten the legs and add one. “We really thought we were onto something and we were right,” says McLaughlin. “With this design, things were starting to gel. Drilling time dropped and productivity increased dramatically.”

Even more significant changes were in the works. The year 2007 turned out to be a watershed for Mountaineer. Management began telling the story of Mountaineer as a business unit, which meant that operations managers had to deliver solid results. The drilling program increased by 280%.The 15 wells CNX Gas scheduled for Mountaineer in 2006 was ramped up to a target 62 in 2007, and the employees increased from eight to 35.

CNX Gas also started to evaluate potential directional drilling companies, which led to a historic partnership. Scientific Drilling was aware of the target of 62 wells and was interested in partnering to attain that goal. Management teams from both companies were brought together and as a result, one Scientific Drilling crew was brought onboard. Today, they are on 50% of CNX Gas rigs.

McLaughlin remembers Scientific Drilling making a full commitment to partner with CNX Gas. The company rented apartments and looked for warehouse space in the area, and it invested in research and development technology for CNX Gas. “They brought their employees in from all over the country just to train them on our drill sites in case we were going to ask for an additional crew. They anticipated our needs and our growth. They were open-minded and experimented with new technology,” says McLaughlin. “Did their CEO have the foresight to see what Mountaineer would shortly become? Maybe.”

Specialized Tools

The key to Scientific Drilling’s success is that they build their own tools, according to McLaughlin. While most other drillers rent their tools from another vendor, Scientific Drilling specifically designed their tools around the CNX Gas Mountaineer operation. They provided CNX Gas with specialized service and even had their CEO make a special trip to northern Appalachian headquarters to meet with the CNX Gas management team. It was during that same trip that a pivotal idea was born.

At this particular meeting, the chairman and CEO of Scientific Drilling asked a very important question: “What can Scientific Drilling do for CNX Gas that they are not currently doing?” The reply from Geoff Fanning, drilling manager, was simple: “Gamma at the bit technology.”

Traditionally, a gamma ray was used anywhere from 20 to 40 feet from the bit. Fanning’s request identified a need to move the gamma to as close as five feet from the bit. Until this point, no one could make that happen because of the size of the drill steel used by CNX Gas, which is 3¾-inch in the motor and 4¾-inch in the wellbore.

At this point “Smart Motor” technology was born, and the gamma would soon move to just five feet away from the bit. The Scientific Drilling management team focused its entire team’s effort to make this happen. McLaughlin and Fanning traveled to California to see the technology first hand. “We were sold,” recalls McLaughlin. It wasn’t long before the gamma at the bit was put into use at Mountaineer and proved to be a huge success.

The Technology

Since coalbed-methane horizontal drilling rates are generally very fast, electromagnetic-measurement-while-drilling (EMWD) systems are the preferred telemetry system, because of the additional data transmitted while drilling. An EMWD system typically transmits data three to four times faster than a conventional mud-pulsed MWD system, and can reduce time required by up to 70% when taking surveys during connections. EMWD systems have no moving parts, can operate with no returns and with aerated mud (i.e., gas, nitrogen, air) and can handle just about any kind of lost circulation material. In addition, EMWD systems are able to utilize bidirectional communications, which is a key to developing additional sensors near the drill bit.

The primary logging-while-drilling (LWD) tool used in coalbed-methane (CBM) horizontal drilling is the radial and focused natural gamma ray tool. Both types of gamma ray tools used in CBM applications are Scintillation Crystal Detectors. The focused gamma ray sensor has a specially configured shield around the gamma crystal to only allow gamma rays to enter from one direction. This “gamma window” is oriented with the bend of the drill motor so that the drilling operator can know the orientation of the gamma crystal window at any time, because it is the same as the bend of the drill motor. This capability is very beneficial to CBM steering operations.

Placing the gamma ray sensors and accelerometer sensors for inclination in the body of a positive displacement drill motor adds considerable value to the CBM projects. Another advantage is the enhancement of depth of investigation, because the sensor payload rides on a carriage on the top of the drilling motor. These new tools communicate to the MWD system using a “short-hop” electromagnetic signal received by the MWD system.

Until now this specialized equipment was not available in a size that could be used to drill a 4¾-inch wellbore size. The first test of the new 3¾-inch Smart Motor occurred on June 10, 2008, just prior to the promised nine-month development plan that came out of the CNX Gas and Scientific Drilling management meeting on September 12, 2007. The results of the field trials have been extremely successful. SDI has since commercially released the Smart Motor and is currently building a fleet of these systems for all the CNX Gas horizontal CBM rigs on this project, as well as adding additional capacity for other similar operations.

What does this mean for CNX Gas? First, the company realized an immediate impact in efficiency. It can now drill horizontally 3,000 feet into the coal seam in 24 hours—a dramatic decrease in drilling time which lowers the cost of the well and improves the economics. Recently, Mountaineer, with a Scientific Drilling crew, drilled a horizontal CBM well in less than eight days. This technology also opens up narrower seams for drilling, increasing potential reserves.

What if the SDI management team was to ask the same question today? McLaughlin would reply: “Cost. Operationally they are top-shelf. But they could work on shaving their costs—not because it’s a deficiency, but because cost control should be a main focus for every operation in every company.” He adds that CNX Gas is constantly working to shave costs and to remain the lowest-cost producer in the eastern United States. “At CNX Gas, we are always looking for ways to improve. Nothing to us is routine.”

The Future

The drilling team is currently looking at 3-D modeling, which will help to cut costs on the Consol coal-side as it pertains to cut-through wells. “They are a technologically aggressive company—a great team to partner with,” says McLaughlin. “We’re a perfect fit because both companies are open to exploring new technologies and to continuous improvement.” Mountaineer plans to increase its complex quad-lateral well-drilling program in 2009. Part of that program will be to drill laterals in new coal seams and unaccessed acreage to prove and produce additional reserves to help CNX Gas reach its strategic vision of 100 Bcf by 2010.

This technology also ultimately helps CNX Gas to be a safer company. The less time spent drilling the well, the less exposure employees and contractors have to potential incidents. Their exposure to accidents is minimized by minimizing their time and exposure at the well-site.