The Duvernay formation in western and northwestern Alberta is showing encouraging results from early wells, which has led to a land acquisitions boom in West Central Alberta, according to Wendy Smith Low, managing director of the energy A&D advisory group for BMO Capital Markets.
“The Duvernay is the source rock for many of the large Devonian oil and gas plays in Alberta. To date, about $1.2 billion has been spent in the play,” she told attendees at Hart Energy’s Developing Unconventional Gas Conference and Exhibition recently held in Calgary, Alberta, Canada.
The 50,000 square mile play’s formations hold an average organic carbon content as high as 20%, she said. “Its liquids content adds to well economics and its overall viability. It holds about 750 trillion cubic feet of gas in the rich-gas window.”
The 50-meter-thick play, which covers about 280 kilometers from north to south, is under development using horizontal wells and multi-stage fracing completions. All pressure tests to date confirm that the fairway is significantly over-pressured.
“The land rush began in 2009 in the Kaybob area,” she said. “Activity continues by Shell Oil, Chevron Corp., Husky Oil, Talisman, Encana and Celtic, among others.” Yet, well results are not well known, because many of the Kaybob wells remain confidential for at least 12 months, then data “begins to dribble out.”
The area’s Pembina play began to experience a similar land rush in 2010, she said. Land will continue to be acquired in large parcels throughout July and October of this year. To date, about 11 wells have been drilled or are under way, and seven more are licensed.
“We will see significant activity there during the summer months,” she said, “But the oil window is a challenge. The jury is still out whether the fracing techniques will be efficient.”
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