Questar sees gold in gas of Wyoming

PINEDALE, Wyo. — They call it the deep well, a 19,500-foot vertical plunge into the windswept Pinedale Anticline.

It is here at the anticline that national energy companies like Shell, Ultra Petroleum and Anschutz have gathered to stake a claim in what is proving to be the 21st century's most sought-after commodity.

As during the Gold Rush of the 1840s, today's new play is in the West. At the heart of it lies natural gas, the new gold that is used to heat homes, manufacture consumer products and generate electricity.

Increased demand is sending natural gas prices skyward. Just last week the Energy Department said consumers could expect heating costs for homes to increase by 16 percent to 25 percent this winter.

For Salt Lake-based Questar Corp., which is betting its deep well will pay big returns, the Pinedale Anticline represents the most significant new natural gas resource in America, said Ronald Hogan, general manager of the Pinedale Division for Questar Market Resources.

It is estimated that the anticline, a geological formation that rises 200 feet above the town of Pinedale, has roughly 40 trillion cubic feet of gas locked deep within tight sandstone deposits. That's enough gas, Hogan said, to satisfy residential demand for Wasatch Front cities for more than 300 years, or the nation's needs for two years.

Yet Questar's deep well is different from the 345 other producing wells scattered across this sagebrush landscape.

Most natural gas wells are drilled to a total depth of 14,500 feet, to the base of a vast sandstone gas reservoir known as the Lance Pool.

However, Questar believes a remote frontier called the Rock Spring Formation may hold new promise.

Questar is spending more than $11 million on its deep well, located somewhere below the 15,000-foot level. That is more than double the $5 million cost of a traditional well.

Drilling started in June 2004 but stopped six months later due to wildlife winter range restrictions. Drilling resumed in June. Completion is set for September.

A year of planning went into the design of this one well, said Paul Matheny, a geologist and regional manager for Questar Exploration and Production.

"It's not just another well that we decided to keep on drilling," Matheny said. "You design the well entirely differently to go to these depths."

To date, Hogan said, drilling has exceeded the 18,000-foot level.