Horn River Basin Shale Play - Horn River Shale Natural Gas Field Information
Horn River Shale Basin Location: Northeast
British Columbia, Canada - South Northwest Territories - East of Liard river - Muncho Lake - Fireside - Summit Lake -
City of Ware - Toad River - Muncho Lake Provincial Park
Horn River Shale Drilling Area: The
major drilling area at Horn River Shale Formation is just northwest of Kotcho Lake and Southeast of Maxhamish Lake B.C Canada.
Major cities in the region are: Nelson Forks, Snake River, Fort Nelson, Muskwa.
What is the Horn River Shale Basin Formation?
The Horn River Shale Formation ( British Columbia, Canada Shale
) is a natural gas shale field located deep below the earths surface. Located mainly in British Columbia B.C,
Canada, the Horn River Basin shale play is the largest shale gas field in Canada according to B.C. Energy Minister Richard
Neufeld. In 2007, companies spent a total of 240 million in new leases for the Horn River Basin Rock Deposit Area.
Another emerging shale play in British Columbia just south of the Horn River formation is the Montney Shale.
Horn River Basin Shale Map - Drilling
Though this field
has been around for a long time, the Horn River Shale is a relatively new discovery as far as natural gas goes. The
Shale boom going on in the United States and Canada is mainly due to higher natural gas prices and new
drilling technologies called Horizontal Drilling as well as Hydraulic Fracturing. In short, after a well is drilled vertically, it is then drilled horizontally. Companies then use new hydraulic
fracturing techniques. These companies use millions of gallons of water and sand at a high
pressure to fracture the shale which then releases the gas. It is then pumped out and run through gas pipelines.
Some experts say that if you would have mentioned extracting natural gas from shale 5-10 years ago, you would have
been laughed at! But now, given the recent boom in shale exploration and new technology, this laughing has turned into
serious business for many large companies.
Experts estimate that there is about 250 trillion cubic feet of
Natural Gas in northeast B.C in which 10-20% would be recoverable. The Horn River Shale is fairly new, even
newer then the Haynesville Shale in Northwest Louisiana. While remaining somewhat quiet about their operation in the Horn River Shale, many
companies are putting up large amounts of money for land leases. It doesn't take a brain surgeon to figure
out that this Shale Play will produce a huge supply of Natural Gas in the coming years. Follow the Money!! Don't forget to check out these other shale plays just as hot as Horn River Shale. Haynesville Shale -Marcellus Shale - Bakken Oil Shale - Fayetteville Shale - Brazil Oil Field - Woodford Shale - Barnett Shale - Chattanooga Shale - Utica Shale
ExxonMobile ( XOM ) and Imperial Oil ( IMO ) have reportedly beefed
up their stake in the Horn River Shale by winning the bid on 8 new blocks of land in a British Columbia land sale. Exxon
now ranks with the big boys by owning around 250,000 acres.
February 26, 2009 - TransCanada ( TRP ) secures shipper commitments for Horn River Pipeline project. TransCanada Corporation (TSX, NYSE: TRP) (TransCanada) today announced the successful
completion of a binding open season, securing support for firm transportation contracts of 378 million cubic feet per day
to connect new shale gas supply in the Horn River basin north of Fort Nelson B.C. to the Alberta System.
The Horn River
pipeline project is approximately 155 kilometres (km) and is expected to use new pipelines up to 36-inch diameter and an existing
pipeline in the area to transport sweet natural gas from the Horn River area to a tie in point on TransCanada’s existing
Alberta System. The pipeline is expected to be operational early in the second quarter of 2011, subject to regulatory
approvals. The proposed project is expected to cost approximately $340 million.
April 21, 2010 - Encana ( ECA ) Entered into farm-out agreement with Kogas Canada Ltd.
(KOGAS), which will invest up to C$565 million over three years towards earning a 50 percent interest in about 154,000 acres
of land in the Horn River shale play and Montney formation in the Greater Sierra and Cutbank Ridge key resource plays
Companies Involved in Drilling the
Horn River Shale - Horn River Shale Stocks
-Encana ECA - In HornRiver we continue to see exceptional results in terms
of operating efficiencies as we advance our gas factory development approach to this emerging resource play. We plan to drill
as many as 16 wells from a single pad while maintaining continuous operations 24 hours a day, seven days per week.
We’ve
been drilling longer laterals, up to 8500 feet and longer, and developing more reservoir, up to four square miles per pad.
As of March 31 we have drilled 12 of our planned 41 well drilling program in the HornRiver for 2010 and we’ve
completed frac operations on 75% of the first 16 well pad.
EnCana’s capital and operating costs of this emerging
resource play have improved and we expect them to continue to do so. Later this month we’ll initiate the use of non-portable
water from the Debolt formation as our primary hydraulic fracture fluid.
- Apache APA - Apache and Encana take lead in the new and hottest shale play ( Horn River Basin Shale ) so far this year. APA
has 425,000 acres of leasehold. In the Horn River, the quality of the rock and the development efficiencies certainly
differentiates it. We can achieve those through large drilling pads on continuous ground acreage. In addition, as we progress
our Kitimat LNG project, our goal is to give Horn River access to international LNG markets. Our Horn River activity continues
to dominate Canadian operations with horizontal wells were drilled in the two island of late developed area during the quarter
with four of the Apache operated 52 pan and three on enhanced and can operated 63 tape. In addition come Apache drilled through
horizontal Wells in our ability area to hold expiring acreage. Drilling efficiencies that result in cost performance continued
to improve with average drill times now at 19 days from the spud rig release and average drill cost at $3.7 million per well
for about 7,200-foot of horizontal section
- Exxon Mobile XOM - We made significant progress during the quarter on our unconventional gas exploration opportunities around the world. In
June, we acquired an additional eight blocks, totaling 110,000 acres in the HornRiver Basin, located in
Northeastern British Columbia, Canada. This acquisition brings our total net acreage in this promising shale gas play to 305,000
acres. Building upon the successful results of our 2008-2009 programs we're actively planning the next stage of our drilling
and evaluation program that will commence later this year.
April 2010 Update - We continued evaluation work on our extensive acreage position in the HornRiver Basin in Canada. Following
our successful drilling campaign last winter, we have begun a second comprehensive multi-well program, beginning with our
first horizontal well in the play.
- Quicksilver Resources KWK - Quicksilver KWK has a nice acreage position in the Horn River Basin Shale - Quicksilver Resources is actively
exploring in the Horn River Basin of northeast British Columbia, where it has leased 130,000 net acres.
2009 Update: Quicksilver finished exploratory drilling activities on two horizontal wells as well as road and pipeline construction
in the Horn River Basin of northeast British Columbia. The company expects to conduct completion activities on these wells
following the spring break-up period.
- Devon Energy DVN - Devon DVN has taken a nice drilling stake in the Horn River Shale Natural Gas Field - Also in Canada
in the second quarter, Devon increased its lease position in the Horn River Shale play in British Columbia to more than 100,000
net acres. The company is now planning its upcoming winter drilling program for the Horn River area.
- EOG Resources EOG - ( From Seeking Alpha ) In the British Columbia HornRiver Basin, we intend to continue a steady
program and drill seven horizontal wells compared to six last year. We now have six months of sustained production from several
of our wells and are encouraged that this program will likely be competitive with other North American shale plays.
We're
also encouraged that the BC government is considering royalty incentives to help offset the challenge of the remote location
and associated costs and make the play more competitive with other North American gas plays. We have 157,500 net acres in
the play and it's worthwhile noting that EOG's current activity is on the west side of the play there is access to a separate
gas pipeline infrastructure with current adequate capacity for a near-term forecasted volume growth. The pipeline will be
expanded in the future to meet increases in drilling activity.
We currently believe that takeaway infrastructure for
the overall field won't happen until early 2012. But given our current access to takeaway capacity we expect to be able to
slowly ramp up production each year so our HornRiver production growth profile will be steady
year-by-year rather than a hockey stick slope. 2010 Update: In the Horn River Basin, EOG will operate an active drilling program in the first half of the year, with the goal
of completing and turning wells to sales during the second half of 2010.
- Nexen NXY - Nexen NXY is very active in the Horn River Shale Basin Play. The Horn River Basin is a significant shale gas play in North America with high
resource density and excellent well productivity. We have approximately 90,000 acres in the Dilly Creek area and 38,000 acres
in the Cordova area in northeast British Columbia, with a 100% working interest in each. To date, we have invested approximately
$480 million in land, infrastructure and wells in the Horn River Basin to progress our shale gas strategy toward development
and reserve recognition.
We have drilled eight horizontal wells with six wells completed to date. Initial production
test results are meeting expectations in terms of resource, initial production and decline profile. With five shale gas wells
on stream at various times, we reached production of over 15 mmcf/d during the year before declining as expected. Our land
position here could support between 500 and 700 wells. Substantial cost savings and productivity improvements were realized
in our 2009 drilling and completion program. We took advantage of learnings from prior activities to improve equipment utilization,
drill longer wells and initiate more fracs per well. All 26 fracs put into the last three wells were successful.
In 2010, we plan to continue our drilling, completions and fracing
program, expand infield facilities and start investing in long-term infrastructure. We will continue to build on our success,
which we expect will lead to further cost savings and productivity improvements. In late 2009, we began work on an eight-well
test program, which is expected to start providing results and production in late 2010. The Horn River Basin is an early-stage
potential shale gas play that has not been developed on a commercial scale. Many of our peers are also working to develop
the future potential of the area.
Limited gas pipeline infrastructure and processing capacity in the Horn River Basin
could potentially constrain early development of the play. To ensure sufficient gathering, processing and transportation capacity
for our early development programs, we have contracted gas pipeline capacity of 96 mmcf/d and associated treating capacity
at the Spectra-operated Fort Nelson plant. We entered into additional agreements that will allow us to participate in projects
that are expanding infrastructure in the region.
2010 Update - Horn River Shale Gas-Successfully Finished Drilling Eight-Well Program
We have finished drilling our eight-well
program and continue to make significant progress on lowering costs and gaining access to the shale reservoir on our substantial
Horn River shale gas position in north-east British Columbia. We plan to complete these wells in the second half of the year
with 18 fracs per well. First production is expected before year end, ramping up to 50 mmcf/d.
Substantial cost
savings and productivity improvements were realized with this drilling program and our average drilling days per well were
under 25 days, down 35% over our previous pad. We currently expect that with an 18 well program we could reduce our all-in
costs even further to under $0.6 million per frac.
As previously announced, we estimate our Dilly Creek lands in
the Horn River basin contain between 3 and 6 trillion cubic feet (0.5 to 1.0 billion barrels of oil equivalent) of recoverable
contingent resource, assuming a 20% recovery factor. Our production results to date, together with those of our competitors,
indicate that recovery factors will be higher. Additional production history will determine recovery factors and further appraisal
activity is required before we can finalize resource estimates.
Imperial Oil IMO - Imperial Oil and Exxon Mobile both have acreage together in the Horn River Basin Shale - In recent land sales, subsidiaries
of Imperial Oil Limited (operator) and ExxonMobil Canada Limited have acquired exploration rights in the Horn River area of
northeastern British Columbia. Since September 2007, the companies have acquired total license holdings of about 115,000
acres. The licenses are located 70 kilometres northeast of Fort Nelson, British Columbia. Imperial Oil Limited and ExxonMobil
Canada Limited each hold a 50 percent interest in the acreage.
- Park Place Energy PRPL - Park Place is looking to get into the Horn
River Basin Play - Park Place is also actively seeking to acquire a blue-sky opportunity and has focused on shale gas
properties in the Horn River Basin and area, which is within the Company's
defined core area for development in North East British Columbia. The Horn River Basin
has been described as significantly larger than the Barnett shale area in Texas which was first drilled in 1981 and currently produces 3 billion cubic feet per day. Wood Mackenzie stated in a
recent report that they predict the Horn River Basin area could hold 50 trillion
cubic feet of natural gas making it the hottest resource play in North America.
.
Nabors Industries NBR - Nabors NBR builds and supplies drilling rigs to companies in the Horn River Shale. We
have several rigs committed to these areas, including a heli-portable rig that's
going to go in the Horn River and the big advantage of that is number one, it's our acreage so we can show how we can drill
but also, it's going to be on a pad.
