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| ARID Device Economics |
The ARID Tool will be leased to Operators on a yearly basis, not sold. Each has a serial number engraved into the ARID Mandrel for tracking purposes. The ARID Tool is leased by well, the serial number is tied to the well name, location and Operator. When the well is plugged and abandoned the ARID Tool will be retrieved and then re-lease or assigned to another well or Operator. The lease charge will include the UIC permit and lifetime replacements of the rubber packers The estimated numbers of ARID Tools to be used in Wyoming are speculative because the tool and process do not currently exist. The potential to change the face of the CBM industry is huge but is difficult to predict a timeline in which the majority of the CBM industry would use the technology. The Bureau of Land Management's Environmental Impact Statement for Wyoming's CBM development indicated 50,000 Federal CBM wells would be drilled. Approximately 25 percent of those wells have been drilled leaving 37,500 potential Federal CBM wells to use this technology. This does not take into account additional State and Fee CBM wells and is only for the Powder River Basin of Wyoming. There are three other major geologic basins in Wyoming that have coal bed methane reserves but the development is still in its infancy. No projections have been made for estimated sales in Montana but sales could easily be 10 times the Wyoming sales or greater. There have been estimates that the potential number of CBM wells to be drilled in Montana could be in excess of 100,000. It must be remembered that the ARID Process would be a huge cost saving for CBM operators. There may be many more additional CBM wells drilled because thinner coal seams become economical to develop as existing infrastructure could be used to transport the gas. Environmental groups have always wanted the CBM industry to re-inject the produced CBM water, now this process and tool can make this possible. The ARID Process should be economical even if natural gas prices fall back to $2.00 MCF (Million Cubic Feet) or less. |
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