Non-Conventional Natural Gas
Coalbed methane (CBM) is an unconventional form of natural gas, different from conventional natural gas. CBM is stored in coal deposits through adsorption. This gas is released when there is a decline in reservoir pressure. Most coal deposits are water-saturated and water needs to be removed to depressurize the reservoir in order for gas production to take place. In some instances, the coal is "dry" and the gas can be produced immediately without de-watering.
Penn West recognizes that any CBM development is a multi-year process, requiring a long-term commitment. Accordingly, Penn West's CBM activities are not completely governed by short-term commodity price movements but by CBM's long-term potential for economic productivity and long-life reserves.
South Swan Hills - Mannville Coalbed Methane Trend
Several years ago, Penn West identified the Mannville Formation is South Swan Hills for CBM potential. This project lies in the southeast of western Canada's first commercial Mannville CBM production, which was initiated in late 2001 at Corbett Creek. Since then, others have launched CBM projects that surround Penn West's holdings. This Mannville CBM play extends over 60 sections of Penn West's lands.
