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No gas gains in sight from Western Canada
Gary Park Petroleum News Calgary correspondent
Without record drilling and advances in the deeper natural gas plays of the Alberta and British Columbia Foothills, Western Canada would struggle to hold the line on deliverability over the next two years, a National Energy Board report has projected.
In a new study of short-term deliverability from the Western Canada sedimentary basin, Canada’s federal regulator forecast the basin will average 16.2 billion cubic feet per day this year and 2004, then drop to 15.8 billion in 2005, a decline of 3 percent from 2002 to 2005. About 60 percent of all production ends up in the United States.
Underlying that trend is an overall decline rate from currently producing connections of about 22.8 percent this year, roughly unchanged for the past four years, which translates into a loss of 3.3 bcf a day for a one-year period. Others believe the decline is closer to 4 bcf per day.
Offsetting that declining deliverability and maintaining a flat production profile has only been possible with a surge in new well connections in recent years, the National Energy Board said.
The board expects the industry to complete 14,400 gas well connections this year, 13,850 in 2004 and 12,850 in 2005 (compared to 6,300 in 1999 and 8,900 in 2000). Flat-out drilling required just to maintain It said the upstream sector “must drill flat out just to maintain production levels,” with National Energy Board Chairman Kenneth Vollman noting that the high decline rates associated with existing production and a shift to lower productivity from new wells will pose challenges to maintain production levels.
The report predicted relatively stable deliverability through 2005 from the Alberta Foothills Front and southeast Alberta, which supply a combined 7.15 bcf per day, or 43 percent of all Western Canada sedimentary basin volumes.
The Alberta Foothills is expected to grow to 633 million cubic feet per day in 2005 from its current 583 million, while the British Columbia Foothills will strengthen to 318 million cubic feet per day from 293 million. Analysts can see no prospects for a big reversal of the Canadian slide until the Arctic comes on stream, given the National Energy Board prediction that there will be a significant drop in activity on the eastern side of the Western Canada sedimentary basin and a further decline in shallow gas drilling after 2004.
However, unconventional gas such as coalbed methane will come into sharper focus, helped by technological advances and high gas prices, the National Energy Board said.
It is counting on coalbed methane experiencing a four-fold increase in wells to 1,200 in 2005 and deliverability reaching 200 million cubic feet per day by the end of 2005.
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