Study More Than Doubles B.C. Gas Resources Estimate

Study More Than Doubles B.C. Gas Resources Estimate

Monday, May 09, 2011
B.C. Ministry of Energy & Mines; NEB

A new joint report on the shale-gas potential of Northeastern B.C.'s Horn River Basin more than doubles a previous assessment of gas resources within the province.

The report released by the National Energy Board (NEB) and British Columbia Ministry of Energy and Mines (BC MEM) titled "Ultimate Potential for Unconventional Natural Gas in Northeastern British Columbia's Horn River Basin" is the first publicly released probability-based resource assessment of a Canadian shale basin.

The report says the ultimate potential for marketable unconventional shale gas in the Horn River Basin is 78 trillion cubic feet (Tcf), including three Tcf of discovered resources and 75 Tcf of undiscovered resources. The Horn River Basin is part of the larger Western Canada Sedimentary Basin.

"This innovative report on shale-gas resources provides Canadians with valuable information about our energy future, particularly as it relates to the Western Canada Sedimentary Basin," said Gaetan Caron, chair of the National Energy Board.

Energy and Mines Minister Rich Coleman said, "This report should provide residents of our province with a sense of optimism about the future. B.C. is recognized for its significant shale gas reservoirs as well as for having world-class regulations."

Placing the Horn River numbers in context, the NEB currently estimates that there is 197 Tcf of conventional and unconventional natural gas remaining in the WCSB -- although this number does not take into account known but as-yet-unassessed unconventional gas resources.

The estimate of total remaining conventional and unconventional natural gas in Northeast B.C available for future demand is 109 Tcf. That includes 78 Tcf of shale gas as well as 31 Tcf of remaining natural gas resources identified in a joint assessment of conventional natural gas resources in Northeast B.C. The conventional gas assessment was released by the NEB and B.C. Ministry of Energy and Mines in 2006.

According to the new report on unconventional gas resources, the medium-case estimate of 78 Tcf for Horn River shale gas is the most realistic scenario. However, the study produced a range of numbers for shale gas potential in the Horn River Basin with the low estimate being 61 Tcf and the high being 96 Tcf.

Remaining Ultimate Potential by Province (Tcf)

The NEB is an independent federal agency that regulates several parts of Canada's energy industry. Its purpose is to promote safety and security, environmental protection, and efficient energy infrastructure and markets in the Canadian public interest, within the mandate set by Parliament in the regulation of pipelines, energy development and trade.

The B.C. Ministry of Energy and Mines manages the responsible exploration and development of British Columbia's energy sector.

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Ford's March Sales Outpace GM's (F,GM)

Ford's March Sales Outpace GM's (F,GM)



Ford Motor Co (NYSE:F) posted a 19% increase in vehicle sales for the month of March, driven by strong growth for its Fiesta, Fusion, Escape, and Explorer, as well as the F-Series, which saw year-over-year sales growth of 25%.

Ford's monthly total of 212,777 surpassed that of General Motors (NYSE:GM), which reported selling 206,621 vehicles in the month, though GM outsold Ford for the quarter, 592,545 to 496,720.

Ken Czubay, vice president of Ford U.S. marketing, sales and service, said, "With gasoline prices eclipsing $3.50 a gallon, consumers are placing a high priority on fuel efficiency in every size and kind of vehicle. Customers are rewarding Ford for our investment in new products as well as more efficient engines and transmissions, which save them money at the pump whether they drive Fiestas or F-Series trucks."

Contango Completes Drilling GOM Well, Notes Reserves Estimate

Contango Completes Drilling GOM Well, Notes Reserves Estimate

Monday, March 28, 2011

Contango O&G Co.

 

Contango has drilled a successful exploratory well at its Swimmy prospect located Offshore Gulf of Mexico on Vermilion block 170. The Company's independent third party engineer estimates this well to have 8/8ths proved reserves of 48 billion cubic feet of natural gas and 1.2 million barrels of condensate, approximately 55 billion cubic feet equivalent (Bcfe), or 37.5 Bcfe net to Contango's 68% net revenue interest.

Production is expected to begin this fall at an estimated rate of 15 million cubic feet equivalent per day (WMmcfed), net to Contango. Estimated net costs to Contango, to acquire, drill, complete, and bring this well to full production status are approximately $26.5 million.

Kenneth R. Peak, Contango's Chairman and Chief Executive Officer, said, "We expect this discovery will replace our production for the fiscal year ended June 30, 2011. Production for the six months ended December 31, 2010 was approximately 18.7 Bcfe. As a result of this well, our all-in estimated offshore Gulf of Mexico finding and development (F&D) costs for fiscal year 2011 are now estimated to be about $1.20/mcfe. The costs used in this calculation include $8.7 million for a potential second well at Vermilion 170; $9.5 million from our earlier dry hole at Galveston Area 277 (His Dudeness); and the $26.5 million outlined above, all net to Contango."

Mr. Peak continued, "Currently, our two Eloise wells are both shut-in for remedial work. Prior to being shut-in, they were producing at a combined rate of 5.0 Mmcfed, net to Contango. Our plan is to recomplete our Eloise South well uphole in the CibOp section as our Dutch #5 well. This recompletion is estimated to cost approximately $6 million, with an estimated initial production rate of approximately 8.5 Mmcfed, both net to Contango. Our Eloise North well recently sanded up and we are currently attempting to repair the well to restore production. If we are unsuccessful, our plan is to recomplete the well uphole in an upper Rob-L section at a net cost of approximately $0.5 million and an estimated initial production rate of approximately 1.5 Mmcfed, both net to Contango. We plan to have both of these wells on-line by mid-summer."

"We submitted our permit to the BOEM to drill our Vermilion 170 well on September 29, 2010, received permission to spud the well on February 16, 2011 and began drilling on February 24, 2011. We estimate this one well will help sustain dozens of jobs and pay royalties to the federal government in excess of $50 million. On March 3, 2011, we submitted an exploration permit to drill our Eagle prospect at Ship Shoal 134. We are hopeful that we will receive a permit to drill this prospect sometime this summer, but due to hurricane season, we may not spud the well until the October/November 2011 time frame.