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MGM posts Mackenzie natural gas numbers
Gary Park For Petroleum News
Canadian Arctic explorer MGM Energy has wrapped up its three-well winter drilling program disappointed, but not deterred given the resource estimates it has attached to its western Mackenzie Delta exploration work.
Backed by qualified reserves evaluators and audited by an independent reserves auditor, MGM says its Ellice J-27 discovery well has a mean estimate of 327 billion cubic feet of total contingent resources and 121 bcf of total prospective resources from the four zones that were logged.
The contingent resources are attached to two zones that were production tested and the prospective resources relate to two zones not tested.
MGM said in a statement the Aklak zone has a best estimate of gross sales gas resources of 283 bcf, ranging from a low 182 bcf to a high 442 bcf, while the Taglu zone has a best estimate of 25 bcf from a low 14 bcf to a high 48 bcf.
Of the other two zones, the best estimate of contingent resources for the lower Aklak zone is 81 bcf (a low 40 bcf and a high 168 bcf) and for the mid-Ellice zone the best estimate is 21 bcf from a low 8 bcf to a high 55 bcf.
Company ‘extremely pleased’ MGM President Henry Sykes said in a release that the company is “extremely pleased” with the results of the J-27 well.
“The size of the discovery far exceeded our expectations for the entire drilling program this year.”
MGM will now apply to the National Energy Board for a significant discovery license, which would give it indefinite tenure of the well based on evidence of sufficient hydrocarbons to support sustained commercial production.
The board has previously issued SDLs for the Langley K-30, Olivier H-1 and Ellice I-48 wells encountered in Taglu sands at about 1,800, 5,700 and 6,900 feet. The mean estimate of contingent gross sales gas resources is 288 bcf and the mean estimate for prospective resources is 169 bcf.
MGM said it is relinquishing about 270,000 net acres of exploration licenses in the region this year because it can retain only discovery land defined by a successful exploration well which involves an SDL application or approval.
Independent engineering report An independent engineering report by McDaniels & Associates Consultants estimates MGM has estimated gross proved-plus-probable natural gas reserves of 800 bcf, of which 600 bcf are proved.
The company said earlier that its just-completed Ellice A-25 well on the western Mackenzie Delta is being abandoned after encountering natural gas in the Aklak formation, but apparently not in sufficient quantities for commercial development.
MGM said that having successfully completed its planned winter drilling it owns 41 percent of the Chevron-BP farm-in lands and the discoveries at Langley E-07 last year and Ellice J-27.
The company can now raise its ownership stake to 50 percent by drilling three more wells in the 2009-10 winter, but it has yet to make that commitment.
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