US based Far East Energy has commenced its second-half 2010 drilling program for the Shouyang Block in China, with three wells, the 34D, 40V and 11D, having been spudded in the past week.
The drilling program is planned to consist of approximately 60 wells drilled during the remainder of 2010 through the summer of 2011.
Currently, 51 of these wells are planned to be drilled in the 1H pilot area to accelerate gas production and maximize gas sales, projected to begin by year-end 2010.
In addition to these pilot area wells, nine parameter wells will be drilled to continue to extend the testing of the #3, #9 and #15 coal seams across a broad area of the northern half (approximately 242,000 acres or 980sq km) of the Shouyang Block with primary exploration in the #15 coal seam.
Far East is also finishing a 10 well fracture stimulation program comprised of fracing six already-drilled wells in the 1H pilot area and four parameter wells located as much as 16km west of the pilot area.
Fracing the six pilot wells will further increase production in the pilot area, and Far East continues to target gas volumes of two million cubic feet per day by year-end, which will double the production announced in late August.
Far East has confirmed that the construction of the Shouyang gas gathering system is underway and is currently on schedule to be completed and commissioned by year-end.
The company has also said that it will fracture stimulate five wells in the Laochang Block in Yunnan, China, to test two coal seams for production.