Shell Canada has landed one of the biggest natural gas discoveries in Western Canada in recent years, announcing a discovery in an untested formation about 21 miles southwest of Rocky Mountain House in central Alberta.
Shell said the Tay River discovery contains 500 billion to 800 billion cubic feet of gas, making it Alberta’s biggest gas find since the 2 trillion cubic foot Caroline gas field was discovered in 1987, also a Shell find.
The exploration well has tested at a restricted flow rate of 30 million cubic feet per day and may have unlocked reserves of 500 billion to 800 billion cubic feet, the company said in a release Dec. 8.
Partners in the Shell Tay River RicinusW 2-6-37-10-W5 well are Shell Canada 75 percent and Mancal Energy 25 percent. It was drilled to a depth of 16,700 feet and encountered about 460 feet of net pay.
Clive Mather, Shell Canada president and chief executive officer, said in a statement that the “significant and exciting” find takes his company “well beyond” its objective of developing new gas sources in the deep Foothills plays of the Canadian Rockies.
“The sizes of the discoveries are getting smaller but this is significant in itself,” Terry Peters, an analyst with Canaccord Capital Corp. in Toronto, was quoted in news reports following Shell’s announcement of the discovery. “It will have a meaningful bottom-line impact on Shell’s conventional reserve and allow them to sustain their Western Canadian production.”
Shell said it made the discovery using proprietary computer technology involving three-dimensional seismic that was developed by Shell International.
“Our foothills exploration team used sophisticated technology and know-how to map, successfully drill and test a new and significant structure in a basin that is generally considered mature,” Ian Kilgour, Shell Canada senior vice president of exploration and production, said in a statement.
The raw gas contains about 60 percent methane and 35 percent hydrogen sulfide.
It is close to sour gas processing facilities and is scheduled to be tied-in and producing by mid-2005. Further delineation drilling is planned for next year.
Shell Canada’s third quarter gas production averaged 416 million cubic feet per day, down 13 million from a year earlier.
Shell Canada has a 75 percent interest in the Tay discovery; Mancal Energy, a company controlled by Calgary’s Mannix family, has a 25 percent interest.
