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EnCana sings Montney praises Gary Park For Petroleum News
EnCana has added its thunderous voice to the hallelujah chorus in British Columbia’s Montney gas play, disclosing it has a production goal of 1 billion cubic feet per day, up from its current 280 million cubic feet per day in the Cutbank Ridge area.
Mike Graham, EnCana’s Canadian Foothills president, told a gas conference in Vancouver that the Montney is without doubt the hottest gas play in Canada and possibly North America.
In the core of the Triassic-age formation he said it is likely 5 bcf will be recovered from each well and EnCana could drill 1,500 to 3,000 wells.
Hopes are also riding high in the Horn River basin, just south of the Northwest Territories border, where EnCana controls 346,000 (205,000 net) undeveloped acres in the Devonian-age shale formations and where its joint venture partner Apache has recently hiked its estimated net resources to 9 trillion-16 trillion cubic feet from an earlier 3 tcf-6 tcf, based on flow rates from three horizontal test wells.
EOG Resources and Nexen have tossed their own estimates of 6 tcf each into the Horn River mix, driving overall calculations to 18 tcf-28 tcf.
So far EnCana has not disclosed estimates from its operated wells in Horn River, but Graham said the rigs are drilling in the “heart of what we think is the thickest, cleanest part of the shale.”
Pad drilling coming He said Horn River wells currently cost C$10 million or more, but costs could be lowered once manufacturing-style techniques such as pad drilling are introduced.
In the Montney, EnCana’s wells are achieving 5 million to 10 million cubic feet per day during the first month of production and, depending on the number of fracs, cost C$5 million to C$8 million.
Horn River has generated some of the highest prices paid for exploration rights in Canadian history, averaging C$23,568 per acre at a May 21 sale, easily surpassing the previous record of C$7,200 in December 2007, while three Montney parcels fetched an average C$62,720.
EnCana has 240,000 net acres and about 544,000 prospective acres in the Montney with 5 tcf-6 tcf of original gas in place, Graham said.
He said estimates of gas in place in the Upper Montney and Lower Montney ranges from 20 bcf to 100 bcf for every 640 acres.
Current infrastructure constraints But the region is hampered by infrastructure constraints, although help is on the way.
Spectra Energy said it will start an open season June 13 for potential shipping commitments for an expansion of its pipeline network in the Horn River area.
EnCana is also doubling capacity at a gas plant to 140 million cubic feet per day that will include spare capacity for a significant ramp up in Cutbank Ridge later this year. The company’s Cutbank output was 234 million cubic feet per day last year, up from only 40 million in 2004.
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