Acquisition adds 88 to 264 possible drilling locations
Blackbird Energy (ticker: BBI) announced the acquisition of 11 sections in the Montney on Feb. 2, bringing its total Montney holdings to 102 gross sections. The acreage, acquired from Paramount Resources, is contiguous with Blackbird’s existing lands. This acquisition adds to their holdings in the condensate corridor of the Montney, one of Canada’s leading unconventional resource plays. The anticipated closing date for the Paramount Acquisition is February 15, 2017.
Source: Blackbird Energy
Montney returns outpace U.S. basins
The Montney is a natural gas bearing formation in western Canada lying on the border between Alberta and British Columbia. In 2013 a Canadian governmental study estimated that the Montney contained 449 tcf of natural gas, 14.5 billion bbls of NGLs, and 1.1 billion bbls of oil. Like the Permian, the Montney is comprised of several stacked pay zones that offer significant development potential.
Unlike the Permian, however, acreage in the Montney has not yet become tremendously expensive. The market has taken note of this opportunity, with shareholder returns in the Montney outpacing the performance of companies in the major U.S. basins including the Permian, according to data compiled by EnerCom Analytics. Rigs have flocked to the Montney, with approximately 25 % of all Canadian rigs operating in the basin.
Source: Blackbird Energy January 2017 Presentation
Blackbird leveraging operational enhancements in Montney development
The condensate-rich gas in Blackbird acreage is estimated to yield at least 100 bbls of condensate per mmcf of gas, with some locations yielding more than 325 bbl/mmcf. Blackbird achieved first production on its Elmworth/Pipestone development stage on January 30, marking the beginning of overall acreage development.
Blackbird has seen significant improvement in their efforts to optimize their drilling program, with drilling time and costs brought down by more than 50% from original levels. Increased intensity completions using slickwater and sliding sleeves have also driven increases in well EUR. Stage Completions’s Bowhead II, described as a “Collet-activated fracturing sleeve system designed for cased hole and open hole applications,” has also facilitated the increased well productivity. With the acquisition adding between 88 and 264 gross drilling locations, the company is poised to take advantage of these improvements.
Blackbird Energy will be presenting at EnerCom Dallas. Click here to register for EnerCom Dallas.
