Husky, Trident team up in coalbed methane deal

Gary Park

Husky Energy is seeking a role in the front ranks of companies developing coalbed methane in Alberta by signing a farmout and joint venture agreement with privately-owned Trident Exploration.

Husky is the first of Canada’s five integrated oil companies to enter what president and CEO John Lau described as an “emerging energy sector in Western Canada.”

The deal, announced July 27, extends an original 2002 venture between the two companies for exploration and development of coalbed methane in the Fenn Rumsey area of central Alberta.

It calls for 120 wells to be drilled over the next two years, with Husky paying 30 percent of an expected C$40 million for drilling and associated facilities to gain a 50 percent stake in production.

Husky and Trident say they have successfully completed 50 wells, of which 32 have been tied in and are producing 6 million cubic feet per day of natural gas.

Husky believes its lands in the Fenn Rumsey area have 500 billion cubic feet of gross natural gas resource in place.

Under the new arrangement, the companies will pursue prospects in east central Alberta from the coal seams of the Horseshoe Canyon formation, which the Alberta Geological Survey estimates holds upwards of 70 trillion cubic feet of gas resource.

Average well production rates of 120,000-180,000 cubic feet per day are projected for the joint venture land.

Trident, one of the most active coalbed methane exploration and production companies in Western Canada, has drilled 192 wells, including 94 in the Horseshoe formation and 72 in the Mannville formation.