• 13 hours PDVSA Booted From Caribbean Terminal Over Unpaid Bills
  • 15 hours Russia Warns Ukraine Against Recovering Oil Off The Coast Of Crimea
  • 17 hours Syrian Rebels Relinquish Control Of Major Gas Field
  • 18 hours Schlumberger Warns Of Moderating Investment In North America
  • 19 hours Oil Prices Set For Weekly Loss As Profit Taking Trumps Mideast Tensions
  • 20 hours Energy Regulators Look To Guard Grid From Cyberattacks
  • 21 hours Mexico Says OPEC Has Not Approached It For Deal Extension
  • 23 hours New Video Game Targets Oil Infrastructure
  • 1 day Shell Restarts Bonny Light Exports
  • 1 day Russia’s Rosneft To Take Majority In Kurdish Oil Pipeline
  • 1 day Iraq Struggles To Replace Damaged Kirkuk Equipment As Output Falls
  • 2 days British Utility Companies Brace For Major Reforms
  • 2 days Montenegro A ‘Sweet Spot’ Of Untapped Oil, Gas In The Adriatic
  • 2 days Rosneft CEO: Rising U.S. Shale A Downside Risk To Oil Prices
  • 2 days Brazil Could Invite More Bids For Unsold Pre-Salt Oil Blocks
  • 2 days OPEC/Non-OPEC Seek Consensus On Deal Before Nov Summit
  • 2 days London Stock Exchange Boss Defends Push To Win Aramco IPO
  • 2 days Rosneft Signs $400M Deal With Kurdistan
  • 2 days Kinder Morgan Warns About Trans Mountain Delays
  • 2 days India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 3 days Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 3 days Russia, Saudis Team Up To Boost Fracking Tech
  • 3 days Conflicting News Spurs Doubt On Aramco IPO
  • 3 days Exxon Starts Production At New Refinery In Texas
  • 3 days Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 4 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 4 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 4 days China To Take 5% Of Rosneft’s Output In New Deal
  • 4 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 4 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 4 days VW Fails To Secure Critical Commodity For EVs
  • 4 days Enbridge Pipeline Expansion Finally Approved
  • 4 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 4 days OPEC Oil Deal Compliance Falls To 86%
  • 5 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 5 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 5 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 5 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 5 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 5 days Aramco Says No Plans To Shelve IPO
Alt Text

The Natural Gas Market Is Set To Boom

With the new lower-for-longer oil…

Alt Text

2 Red Flags For The World’s Top Shale Play

Changing legislation and taxation for…

Brian Westenhaus

Brian Westenhaus

Brian is the editor of the popular energy technology site New Energy and Fuel. The site’s mission is to inform, stimulate, amuse and abuse the…

More Info

Apache Corp Make the World's Largest Shale Gas Discovery in British Columbia

Apache Corp Make the World's Largest Shale Gas Discovery in British Columbia

American oil and gas prospector Apache Corp stunned natural gas investors Thursday June 14, 2012 with a natural gas discovery announcement, the main point of which is, “ . . . . in terms of just resource, with the 1 well we drilled horizontal, we put 6 fracs on it. It’s going to go to 18 Bcf of gas, came on at 22 million a day, a tremendous resource.”

That’s 22 million cubic feet a day, an estimate of 18 billion cubic feet from the well in its primary production.  One well, only one, in a shale formation.  For investors in natural gas this is a long term, low profit, produce all you can at the lowest possible price – problem.  Some folks swirling comments about Chesapeake would have the blame fall on one guy, but the facts are North America has a huge supply of natural gas and its gotten more huge last week.  The industry has just been knocked onto its heels; the next big profit period will be years, probably a couple decades away.

For consumers natural gas has just become a very reliable source of fuel at historically low prices.  For those thinking about natural gas vehicles and other uses of natural gas, the potential for long-term supplies at good prices has improved dramatically.  In the meantime there will be economic growth, jobs and new products and services to distribute and use all this gas.  North America’s luck has just turned.

Apache may have made one of the world’s largest shale-gas discoveries in a remote corner of northeastern British Columbia.  The first estimate is a massive field containing as much as 48 trillion cubic feet of recoverable natural gas.

Liard & Horn River Basin
Liard & Horn River Basins.

Apache drilled three wells into its leased acreage in the Liard Basin of British Columbia (a sub basin of the Mackenzie Basin) of Canada.  The Liard Basin locations are just to the south of where British Columbia’s northern border meets the borders of the Yukon and Northwest Territories. The wells tapped into a massive shale-gas reservoir so large it could supply U.S. demand for almost two years.

Sub Basins of the Mackenzie Basin.
Sub Basins of the Mackenzie Basin.

John Bedingfield, Apache vice president of worldwide exploration, said at the company’s investor day, “This is probably the best shale gas reservoir in the world.”

Just one of the three prospect wells drilled in the region was treated with the still controversial multiple-stage hydraulic fracturing process that’s the foundation for North America’ prolific shale-gas reserves. The well was “fracked” six times, delivered an average of 21.3 million cubic feet of gas per day over its first thirty days of production.   Apache believes this is the most prolific shale-gas test well ever drilled.

The Liard Basin is located in northeastern British Columbia, west of the Horn River basin. Most drilling activity is taking place in the central part of the basin.  The early overview has the Liard as covering 1.25 million hectares. Apache, the largest player in the region, has drilling rights to 180,000 hectares, a little over 15%, about 430,000 acres.  The wells have already been connected to pipelines in the region and the gas is sold.

Natural gas is now selling at $1.78 US per 1,000 cubic feet at the Alberta hub, which is below the cost of much production. In the U.S. prices are higher, $2.60 US a thousand cubic feet. Apache estimates the cost of production from its high-production Liard wells at $2.57 US a thousand cubic feet, including a 12-per-cent return on investment.

Because of the low North American natural gas price, Apache is not likely move quickly to fully develop the new resource. Meanwhile, Apache will have to do enough drilling in the Liard Basin to maintain its gas rights there.

Apache is also a partner in a natural gas liquefied natural gas terminal at Kitimat on the Pacific Ocean shore where some of the vast Canadian reserves can be sold overseas.  Natural gas is selling in the range of $16 US a thousand cubic feet in Asia.

This is an enormous find, with big, big numbers.

Of great interest are those fracturing numbers.  Six aren’t very many, when 20 and 30 or more are frequent practices.  Just how large the Liard is when all the territory is examined will be a very interesting number, too.

The consumer’s good news is they’ve discovered lots of natural gas up in northeastern British Columbia and companies will be producing that gas for many years to come – the bad news is that they have identified a lot of gas in northeastern British Columbia and elsewhere and it has seriously depressed the prices.

By. Brian Westenhaus

Source: Investor Disaster = Consumer Bonanza From Natural Gas




Back to homepage


Leave a comment
  • Craig King on June 19 2012 said:
    These really are wonderful days for North America. I see Shell is building a network of NG gas stations across America so that truckers can have confidence in the on-road application of NG. Electricity costs will start to fall so more production facilities will come home from China and elsewhere.

    America resurgent, what joy.
  • Jonathan on June 19 2012 said:
    Fracing is criminal. Watch the documentary Gaslands.
  • Mike Brassington on June 20 2012 said:
    Is this benefiting USA or Canada?
  • Kerm Anderson on June 26 2012 said:
    Kerm - It appears to be 22 million a day and 18 billion total, not 22 billion a day. I'd still claim it if it was mine...

    Tom

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News