GILLETTE -- A crisp, resounding THWAP!

That's the sound that would be heard if coal-bed methane producers were to slap their heads at the same time as they came to this realization:

We could have produced half the number of wells, avoided half the impacts and gotten the same amount of gas.

Laramie-based WellDog Inc. is delivering some startling news to producers in the Powder River Basin coal-bed methane industry. Using its patented spectroscopy technology to measure down-hole gas content in coal and in water that resides in coals, the company says it can predict and rank the top producers in a group of wells.

The goal is to identify which wells will produce the most gas and the least amounts of water, said WellDog President John Pope. With this information, a producer can select his top three or five wells from a group of a dozen, for example, and forget about the others.

"The reaction ranges from disbelief to, 'Yeah, we know,'" Pope said. "Early in the play, permits were treated as gas. Now as the play is starting to mature, production is viewed as something that needs to be proven."

The coal-bed methane industry here in northeast Wyoming has a 51,000-well permission slip from the Bureau of Land Management. But that "reasonable, foreseeable" 51,000-wells scenario is fading in the glow of some emerging technologies.

Better reservoir mapping tools, such as WellDog's, and multiple-seam production techniques will likely allow the industry to harvest coal-bed methane even beyond the basin's estimated 25 trillion cubic feet of recoverable reserves, according to those in the industry. And the major side-effect of these smarter strategies may be fewer wells, fewer environmental impacts from coal-bed methane water, and a prolonged period of gas production for an industry that grosses some $2.7 million in sales every day.

"If the technology works, companies will certainly take advantage of it," said Bruce Hinchey, president of the Petroleum Association of Wyoming. "Any businessman is going to look at ways to cut costs."

Hinchey noted that WellDog isn't the first company to promise a revolutionary new tool to the coal-bed methane industry. However, with continued regulatory scrutiny, producers here are very willing to try new things, he said.

And what are the potential savings?

One WellDog case study of a 2,600-well field in the basin indicated that the producer could have recovered the same amount of gas with just 1,100 wells, according to Pope.

"With our technology, they could have saved themselves a couple hundred million dollars," Pope said. "They could have produced 70 percent less water without reducing the amount of gas they produced or the royalties that were enjoyed by our state."

Evolving strategies

With numbers like 51,000 and 25 trillion, one might think you could spike a well anywhere in the Powder River Basin and open the spigot to an endless supply of coal-bed methane. But coal seams here are discontinuous and have highly varied water and methane qualities -- even between wells spaced just 40 acres apart, according to Pope.

So not every well is successful. Of 18,087 wells drilled in the basin to date, 1,123 were plugged and shut in with no production, according to the Wyoming Oil and Gas Conservation Commission. That's a 6 percent dry hole rate, which isn't too shabby compared to industry standards.

However, some argue that many of the "production" wells actually produced little gas, so the failure rate might actually be somewhat higher.

Whatever the case, Casper geologist Jimmy Goolsby agrees there are significant geological challenges. The first attempts to produce methane from Powder River Basin coals were focused on the highest points of a seam where gas might concentrate. But the industry hasn't drilled with that kind of strategy since.

"I think we could high-grade this thing a great deal if we did more of that," Goolsby said.

Early production was focused on the shallow 50-foot-thick coals, but the industry has begun to venture into somewhat uncharted territory as it moves westward. Goolsby said some companies have recently focused on bands of coal thinner than 20 feet thick. And the industry is figuring out how to produce from several layers of coal with one well as opposed to separate wells for each seam.

Producers are also discovering they can drain a much larger area with one well in some areas.

Casper geologist Gene George said Yates Petroleum discovered a field in which it could drill a well every 160 acres as opposed to every 80 or 40 acres, and still recover the same amount of gas. However, he attributes the larger spacing less to geology than to drainage from neighboring wells.

"When we get into an area and we find it is partially depleted, we might drill half as many wells because the amount of gas left will only support the cost of half as many wells," George said.

Permits vs. production

Six years, 19,500 wells and 2.5 billion barrels of water after the beginning of major commercial coal-bed methane production here, the industry appears to be spawning some new technologies that may significantly alter the how coal-bed methane is produced.

Pope said he believes the advancements may also dispel a common belief -- the belief that permits automatically translate into production.

In its June issue of Geo-notes, the Wyoming Geological Survey pointed to "slower than expected" permitting from the Bureau of Land Management for an overall decline in production since October 2003, when the basin peaked at more than 1 billion cubic feet (bcf) of gas per day. Current production is about 900 million cubic feet (Mmcf) of gas per day.

Hinchey and other industry leaders continue to point to permitting difficulties at the BLM and the Wyoming Department of Environmental Quality collectively as the chief reason for not being able to regain the 1 bcf per day benchmark.

"Permits do equal production in this play," Hinchey said. "You just don't see the number of permits you did in 2000 and 2001."

A producer certainly can't drill new wells without new permits, but Pope said he believes it is smarter and more strategic drilling and production programs that will make the biggest strides in opening the basin's coal-bed methane spigot.

"The industry is engaged in what has turned out to be a very difficult technical process, which is extracting gas from coal," Pope said. "On the surface it appears to be easy, but the actual physical processes and chemical processes that happen during production are very complicated."

Pope said he and his partners at WellDog didn't know exactly what kind of technical service they wanted to develop for the industry when the company began in the late 1990s. But they did know they wanted to develop something that helped their state keep its new coal-bed methane industry without sacrificing its environment.

"We're just all in this bind right now. How do we get more gas without compromising the environment? And the answer is technology," Pope said.

Energy reporter Dustin Bleizeffer can be reached at (307) 682-3388 or dzeffer@trib.com.