Normally-Pressured Lance (NPL) adjacent to Jonah field will need EIS before BLM greenlights 3,500 directional well program

Private gas producer Jonah Energy is working to bring a major new field to development called the Normally-Pressured Lance Project (NPL).

Jonah Energy is king of the Jonah field

Jonah Energy is the largest operator of the Jonah field in southwestern Wyoming, a major conventional natural gas play that dominated many of the headlines prior to the shale boom.

Formed in 2014 with an investment from TPG Capital, Jonah Energy’s first acquisition in the play was with Encana (ticker: ECA). This agreement included 24,000 acres and over 1,500 active wells.

Since then, the company has expanded its position in the field, most recently purchasing LINN Energy’s western Wyoming assets this May. In this deal, Jonah paid $581.5 million for 27,500 net acres and interest in 1,200 producing wells. Pro forma for the acquisition, Jonah will produce about 450 MMcfe/d net from 2,100 producing wells over 145,000 net acres.

“The properties consist of approximately 27,500 total net acres including ~16,000 net acres in the Jonah and Pinedale Anticline fields with first quarter net production of approximately 129 MMcfe/d, proved reserves of ~384 Bcfe (1) and proved developed PV-10 of approximately $369 million.(2)” is how LINN Energy described the asset in a May 2017 press release.

Jonah will increase its production significantly, however, if it begins development on the Normally-Pressured Lance (NPL) gas field. The NPL is located adjacent to the Jonah field and covers a significantly larger area. Jonah Energy reports that the NPL encompasses about 141,000 acres. The field could produce up to 5.25 Tcf of gas, so development is a major priority for Jonah.

Good News for Wyoming: Jonah Energy Targets another 5.25 TCF of Gas

Source: Jonah Energy

Final environmental decision expected this year

Jonah intends to develop the field using up to 3,500 directionally drilled wells, drilling up to 350 wells per year.

As the vast majority of the land under consideration is U.S. government property managed by the Bureau of Land Management (BLM) development requires a through environmental impact statement.

This process was begun six years ago by Encana, when that company still had operations in the area. The draft EIS was completed in early July, and final decision is expected in late 2017. Much of the NPL area is sage grouse habitat, which makes development more complicated.

Wells will produce for 40 years

If approval is granted, Jonah reports that it may begin development in 2018. If the field is fully developed, drilling could take ten years or more, with each well producing for about 40 years.

Mead sees NPL as significant biz op for Wyoming

Wyoming Governor Matt Mead submitted his own comments about the project to the BLM yesterday, encouraging the BLM to issue its decision quickly to avoid project delays. “This is significant for Wyoming,” Governor Mead remarked. “Permitting new oil and gas projects is a priority and NPL is a great opportunity.”

In his letter to the BLM, Governor Mead said, “I encourage the Bureau to issue its Record of Decision by the end of the year to avoid further costly delays that negatively affect the State’s economic prosperity.”

Wyoming’s coffers have been eaten away by the oil and gas downturn that started in 2014 in combination with the decline of coal power generation in recent years.

The Wyoming Mining Association describes Wyoming as the nation’s leading coal producer since 1986, saying that Wyoming provides about 40% of America’s coal through the top 10 producing mines located in the Powder River Basin.

The Wyoming State Historical Society offers a history of the Jonah field and the environmental impact relating to wildlife from development of the Jonah field and Pinedale anticline.

The Wyoming State Historical Society describes the Pinedale anticline and the Jonah field as follows:

“The Pinedale Anticline Project Area (PAPA) is located in central Sublette County, Wyoming, on a narrow, diagonal 30-mile swath of land that stretches from just outside the Pinedale town limits south along U.S. Highway 191 to about 70 miles north of Rock Springs. It consists of 197,345 acres, 80 percent surface of which is federal, operated by the Bureau of Land Management (BLM), five percent is State of Wyoming, and 15 percent is owned privately. By 2000, the PAPA was one of the newest and most productive gas fields in the continental United States. Gas reserves are estimated at up to 40 trillion cubic feet. That’s enough to serve the nation’s entire natural gas demand for 22 months.

“The Jonah Field is located south of the Pinedale Anticline and also in Sublette County. It is approximately 35 miles south of Pinedale and about 70 miles north of Rock Springs. After being rediscovered in the early 1990s, Jonah Field was heralded as one of the most significant on-shore natural gas discoveries in the second half of the 20th century. The field has a productive area of 21,000 acres and is estimated to contain 10.5 trillion cubic feet (297 billion cubic meters) of natural gas. The National Petroleum Council, in its 2007 report “Facing the Hard Truths about Energy,” estimated total traditional natural gas resources in the Lower 48 States to be 764 trillion cubic feet. Ninety-eight percent of this field is managed by the Bureau of Land Management, with two state sections of one square mile each, and one private section of land,” the WSHS said.

A new energy project of proportionate magnitude would help shore up some of the state’s recent budget shortfall.


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