Ministry of Energy, Mines and Petroleum Resources Looking to the Future: Development in the Horn...
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Transcript of Ministry of Energy, Mines and Petroleum Resources Looking to the Future: Development in the Horn...
Ministry of Energy, Mines and Petroleum Resources
Looking to the Future: Looking to the Future: Development in the Horn River BasinDevelopment in the Horn River Basin
B. KerrB. Kerr
INTRODUCTION – Horn River BasinCONCEPTDATA SOURCESGAS IN PLACE MAPPINGLAND POSITIONSRELATING OGIP MAPPING TO POTENTIAL RESERVE
STATEMENTSDEVELOPMENT SCENARIOS
- ACCESS AND RECOVERY- PACE AND PRODUCTION- VALIDATION
SERVICE REQUIRMENTSSUMMARY
Overview
Horn River Basin in Northeast British Columbia
• Between Liard Basin to West and Slave Point Carbonate Platform to East
• Over 14,000 sq.km
• 60% tenured (rights vary)
• Access to basin from Liard Hwy (77) in the west and Sierra Yoyo Desan Rd in the east.
• World class shale basin
Introduction
Concept
Use public information and OGIP mapping to approximate scale of future development
Apache Press Release April 8, 2008http://investor.apachecorp.com/releasedetail.cfm?ReleaseID=303676
- Apache net 207,000 acres.- Apache Encana JV on >400,000 acres.- Apache net gas resource 9-16 tcf.
Apache Analysts Review, October 23, 2008.http://www.apachecorp.com/Resources/Upload/PrevArticleFiles/files/Apache_2008_Analyst_Review_08_Canada.pdf
- Majors Land positions.- Production Profiles.
EOG Investor Presentation, March 2009.http://www.eogresources.com/media/slides/InvPres_0309.pdf
- 157,500 net acres.- ~ 6 tcfe (60% drillable, 25% recovery)
Nexen Q1 2008 Earnings Conference Call, October 29, 2008.http://www.nexeninc.com/files/Conference_Calls/q1_2008_cc_script.pdf
- 3 – 6 tcf potential reserves.- 123,000 net acres.- assuming 20% recovery.
Ross, D.J.K. and R.M. Bustin. Characterizing the shale gas resource potential of Devonian-Mississippian strata in the Western Canada sedimentary basin: Application of an integrated formation evaluation. AAPG Bulletin 2008 92: 87-125.http://aapgbull.geoscienceworld.org/cgi/content/full/92/1/87
Walsh, W. Unpublished internal maps of Devonian shale gas potential in the Horn River Basin, October 2008.
Data Sources
GAS IN PLACE MAPPING –
- Walsh (EMPR Internal)
- Based on isopachs of Muskwa/Otter Pk and Klua/Evie fms- Considered Muskwa / Otter Park and Klua / Evie to be separate and distinct.- Assumed constant shale densities- Varied gas contents through iterations to produce high and low cases
- Ross & Bustin (AAPG Bulletin Jan 2008)
- Based on isopachs, geochemical analyses of core and estimates derived from calibrated geophysical logs.- Considered free and adsorbed gas capacities- Limited data within Horn River Basin
Gas In Place Mapping
- Potential OGIP calculated and iso-areas generated and contoured.
- Large volumes of gas predicted based on thick packages of shale.
- OGIP values applied to Gas DSUs across Horn River Basin for
- Walsh low case: 332 TCF mean 53 bcf/dsu, range 0-113 bcf/dsu- Walsh high case: 820 TCF mean 131 bcf/dsu, range 1-287 bcf/dsu- Ross: 782 TCF mean 126 bcf/dsu, range 20-300 bcf/dsu
Legend
BCF / DSU
ROSS
20 - 30
31 - 40
41 - 50
51 - 60
61 - 70
71 - 80
81 - 90
91 - 100
101 - 110
111 - 120
121 - 130
131 - 140
141 - 150
151 - 160
161 - 170
171 - 180
181 - 190
191 - 200
201 - 210
211 - 220
221 - 230
231 - 240
241 - 250
251 - 260
261 - 270
271 - 280
281 - 290
291 - 300
Gas In Place Mapping
• Much of the Horn River Basin has been tenured over the last 5 years• Record land sales in B.C. - price per hectare and total sales
For the purpose of analysis of potential future activity subdivide the basin into three areas:
1. Major operators (as identified by Apache presentation October 23 2008)
2. Unknown operators (all other tenure in basin as of March 2009)3. Untenured land
Land Positions
“Major Operators”
Operators identified in the Horn River Basin
• Devon• Nexen• EOG• Imperial / Exxon• Apache / Encana JV
Land Positions
Unknown Operators Untenured Land
Land Positions
DSU
OGIP Public *
OGIP Walsh Low
OGIP Ross
OGIP Walsh High
Nexen 119 10-20 9.9 14.9 24.9
Apache** 284 45-80 23.4 45.9 59.8
EOG 226 40 20.5 35.2 52.6
*Assuming 20% recovery for Apache**Assuming 50% Net of ECA/APA identified land
• Calculate the OGIP on the lands attributed to companies and compare these values to volumes from press releases.
• Walsh estimates for OGIP resource “bookend” company statements and Ross values.
Relating OGIP Mapping to Potential Reserve Statements
Land Category DSU
OGIP Walsh Low
ROSS OGIP
OGIP Walsh High
Major Operators 1500 125 231 320
Unknown Operators 2760 122 306 293
Untenured Land 1971 85 245 207
Total 6231 332 782 820
• Calculate the OGIP on categories of landsMajor OperatorsUnknown OperatorsUntenured Land
Relating OGIP Mapping to Potential Reserve Statements
Two scenarios – Walsh Low / High Case OGIP- Consider availability of land for drilling
- Exclude 10-30% of land from development as inaccessible on land holdings of major companies- Exclude 30-50% of land from development for unknown companies for time frame of analysis.- Exclude 70% of untenured land from development as unprospective*
- Consider recoveries on land that is drilled- 20-30% recovery
- Consider potential production profiles and EUR per well- IP 4.9 mmcf/d, EUR 5.5 bcf- IP 3.3 mmcf/d, EUR 4.1 bcf
* >95% of the basin is interpreted to have more than 30 bcf OGIP per DSU
Development ScenariosAccess and Recovery
Drilling Activity
Major Operators Lands – 20 year full development
Unknown Operators Lands – 30 year full development
Untenured Lands – 40 year development
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
Years
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
Years
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
Years
Development ScenariosPace and Production
Annual Drilling – Pessimistic OGIP, Limited Accessibility, 20% recovery, 4.1bcf/well
0
100
200
300
400
500
600
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019
2021
2023
2025
2027
2029
Year
An
nual
Dri
llin
g
ConventionalConventional
MajorsMajors
UnknownUnknown
UntenuredUntenured
Development ScenariosPace and Production
0
200
400
600
800
1000
1200
19
89
19
91
19
93
19
95
19
97
19
99
20
01
20
03
20
05
20
07
20
09
20
11
20
13
20
15
20
17
20
19
20
21
20
23
20
25
20
27
20
29
An
nu
al D
rilli
ng
ConventionalConventional
MajorsMajors
UnknownUnknown
UntenuredUntenured
Annual Drilling – Optimistic OGIP, Good Accessibility, 30% recovery, 5.5 bcf/well
Development ScenariosPace and Production
00.5
11.5
22.5
33.5
44.5
5
20
09
e
20
10
e
20
11e
20
12
e
20
13
e
20
14
e
20
15
e
20
16
e
20
17
e
20
18
e
20
19
e
20
20
e
20
21
e
20
22
e
20
23
e
20
24
e
20
25
e
20
26
e
20
27
e
20
28
e
Pro
du
ctio
n (t
cf/y
ea
r)
Year
Pessimistic Shale Forecast
Development ScenariosPace and Production
Optimistic Shale Forecast
BC’s Current Production
DSUPress Release Pessimistic Optimistic
Nexen 119 3-6 1.4 6.7
Apache 284 9-16 3.3 16.1
EOG 226 6 2.9 14.2
- If these development scenarios were applied on company lands, how would they compare to potential reserves as announced?
Development ScenariosValidation
Resources needed to support drilling and completions
- Frac Sand- Water
Frac Sand
(tons) Water (m3)
Pessimistic 8,849,100 102,105,000
Optimistic 19,743,100 227,805,000
Max Annual 1,404,000 16,200,000
Max Annual Water – 25% of Annual Water Use in CRD (Greater Victoria)Max Annual Frac Sand – 150+ truck loads of sand per day.
Service Requirements
- Large volumes of gas in place- Significant reserve expectations- Successful development of play will require 10’s of thousands of wells
- Development over 20 years will require unprecedented activity levels- Peaking at 3 wells rig released every day of the year
- Optimistic case as presented (16,000 wells) is development of 62% of the sections in the basin.
Summary