Quebec on verge of breakthrough; Utica shale up to 9,000 feet thick
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Get ready to add Quebec to the list of Canada’s hydrocarbon producing provinces and the list of shale gas regions.
A study by Texas-based reservoir engineering firm Netherland, Sewell & Associates has bolstered the potential of the Utica shale in the St. Lawrence Lowlands to 150 billion cubic feet per square mile, 66 percent greater than any previous numbers.
Questerre Energy, a junior partner with Talisman Energy and Forest Oil in the area, said the report estimates its own prospective recoverable resources at 2.2 trillion-8 trillion cubic feet, with a best estimate of 4.28 tcf.
Questerre CEO Michael Binnion said the report is the first confirmation of the significance of Questerre’s discovery.
He said the calculations are supported by “significant and material data” and relate only to lands that “have geology validated by successful wells.”
Binnion said the independent estimates are “materially higher than past industry figures, which we believe reflects the additional data, technical work and advancement on the learning curve.”
Assessment being updated Questerre said the assessment is being updated to include results from the recently completed St. Edouard No. 1 vertical well that tested in August at 2.6 million cubic feet per day with an average rate of 700,000 cubic feet per day on a one-inch choke.
The well has been shut-in to gather additional pressure data and a final report is due for release this fall.
Binnion said Questerre has now “confirmed effective rock properties and encouraging stable gas rates” over a 60-mile area.
Questerre and operator Talisman are currently reviewing potential locations for horizontal wells adjacent to the vertical test wells.
The Utica shale is present in Quebec, New York and Pennsylvania with thickness varying from 500 feet to 9,000 feet.
Binnion had previously said that problems obtaining capital had slowed commercialization of Quebec’s gas plays by 12 to 18 months; a pilot horizontal program is scheduled for 2010 and commercial development is targeted for 2011.
Infrastructure needed A CanaccordAdams equity research report said the participation of Talisman and Forest improves the chances of Quebec’s Utica shale becoming commercial “in the next few years,” but doubts additional gathering, processing and transportation infrastructure will be in place until after 2012.
Preliminary results from the Netherland, Sewell study also estimate total prospective original gas in place volumes for Questerre’s gross acreage at 82.7 tcf-180.5 tcf with a best estimate of 129.2 tcf.
Questerre is involved with Talisman in exploring 720,000 gross acres of the Utica shale. Subject to farm-in and participation arrangements, it could qualify for a 25 percent working interest.
Two other Quebec interests include a partnership with Forest Oil and Gastem on the 113,000-acre Yamaska block, where a gross overriding royalty is being converted to a 20 percent working interest, and a 56 percent working interest with Gastem on the 181,000-acre St. Jean block close to the United States border.
Questerre also has exploration interests in British Columbia’s Greater Sierra and Horn River gas regions.
—Gary Park
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