22.4 billion BOE recoverable
The National Energy Board of Canada released a resource assessment today, examining the Duvernay Shale of Alberta.
Deposited during the Devonian Period, the Duvernay Shale is located throughout central Alberta, running from Grande Prairie almost to Calgary. Located near, and in some locations directly below the Montney, the Duvernay is part of the larger Western Canadian petroleum system.
Source: National Energy Board
The NEB estimates that the Duvernay’s marketable resources are 76.6 Tcf of gas, 6.3 billion barrels of NGLs and 3.4 billion barrels of crude oil. “Marketable resources” represent the total amount of petroleum that can be recovered from the formation, not the actual reserves nor the original hydrocarbon in place.
Source: National Energy Board
According to Reuters, this makes the Duvernay the largest resource of unconventional crude oil and condensate in Canada. However, the Duvernay’s natural gas reserves are exceeded by two other basins in Canada. The Montney wears the crown with the largest natural gas resource, 449 Tcf recoverable. Following the Montney is the Liard Basin with 216 Tcf, located in British Columbia, the Yukon and the Northwest Territories.
Source: National Energy Board
Best rock lies in western Duvernay, around Whitecourt, Alberta
In its assessment, the NEB split the Duvernay into two plays, the East Shale Basin and the West Shale Basin. The West Shale Basin is the larger of the two by a significant margin, and holds a much larger area of sufficient quality that it was assessed. Other locations were not assessed because “they were considered unlikely to be developed; such as where the Duvernay Shale is less than 10 m thick, is underpressured, where its mapped in-place gas contents are less than 50 m3 of volume per m2 of area, and where oil contents were more than 2000 barrels per million cubic feet of gas (i.e., there is too little gas in the reservoir to help drive the oil out).”
Source: National Energy Board
The NEB’s analysis indicates different “hot spots” for different commodities. The highest gas concentrations are found around the middle portion of the West Basin, peaking at nearly 29 Bcf/section. The most productive oil locations are found in the northern portions of the West Basin and the southern portions of the East Basin, with a maximum marketable oil of almost 1.5 MMBO/section. NGL concentrations are highest in the central portion of the West Basin, reaching 2,370 MBBL/section. Overall, it seems the central part of the West Basin has the highest-quality rock, at least in terms of hydrocarbons per section.
Source: National Energy Board
Source: National Energy Board
Source: National Energy Board
This predominance of the West Basin is also illustrated in the type curves of each location. Wells in the West Basin are expected to peak around 325 BOEPD, while East Basin wells peak at about 80 BOEPD.
Source: National Energy Board
Companies with land positions in the Duvernay
In June, Raging River Resources (ticker: RRX) announced it had accumulated approximately 100,000 net acres of land prospective for light oil in the Duvernay Shale basin.
“Although the play remains in its infancy,” the company said in its announcement, “the characteristics exhibited by it including relatively shallow depth, contiguous net pay, large estimates of total petroleum initially-in-place, light oil phase and the expected ability for productivity and recovery improvements through technology are consistent with Raging River’s strategy for creating per share value.”
Source: Raging River Exploration
Raging River said it expected to drill its first evaluation well into the Duvernay in the fourth quarter of 2017, with plans to drill up to six additional evaluation wells in 2018.
Listen to the Raging River presentation webcast from the EnerCom conference in Aug. 2017 here.
Download the Raging River EnerCom conference presentation deck here.
Encana (ticker: ECA) said in its September investor presentation that it has drilling inventory of approximately 500 premium locations in the Duvernay.
Source: Encana
