The natural gas potential in British Columbia has been on the radar screens of producers for years, but BP plc appears ready to sink C$1 billion in the region to unlock coalbed methane (CBM) reserves using a process it developed at its successful Wamsutter project in Wyoming.

The Mist Mountain Coalbed Gas Project by subsidiary BP Canada Energy Co. would assess whether gas in the Crowsnest Coalfield of British Columbia may be produced in an economic and environmentally responsible way, BP said. BP Canada, which focuses primarily on gas development for the major, currently produces about 500 MMcf/d at its Western Canadian facilities.

In its most recently published estimate in late 2003, the BC government said the CBM resource potential in the Crowsnest field was 12 Tcf.

BP is evaluating an area that covers about 500 square kilometers near the communities of Fernie and Sparwood, BC. Production over the life of the Mist Mountain project "could equal 40 years of current demand in BC's Lower Mainland," BP said. The Mist Mountain project includes three to five years of environmental studies, technical research and consultation prior to a decision on commercial development, and BP wants provincial approval to access public land for exploration.

"We are currently in the appraisal stage, expected to last three to five years at a cost of up to C$100 million," BP said. The purpose of this stage is to access the viability of the CBM production, and activities planned include:

BP also has entered into a commercial agreement with Elk Valley Coal to evaluate CBM opportunities on the Elk Valley acreage in British Columbia.

BP is not alone in its quest for BC gas, but it holds a strong hand to develop the gas reserves more economically than some of its possible competitors. BP's gas fracturing techniques are said to have helped the company to achieve production rates of up to 10 times higher than more conventional methods, and recoveries per well of five times higher.

BP went to school on unconventional gas at its Wamsutter, WY, field, which is the company's largest contiguous block of BP-operated acreage in the United States. There, BP operates about 40% of the acreage. In 2005 BP announced it would invest more than $2.2 billion in the Wamsutter field over the next 15 years to explore CBM resources using a blend of seismic, horizontal drilling and hydraulic fracturing (see NGI, Aug. 14, 2006; March 13, 2006).

BP wants to build its share of ultimate recovery from the Wamsutter field by around 3 Tcf, which would increase its daily net production to 250 MMcf/d from 135 MMcf/d by the end of the decade.

Wamsutter's proven technology is considered an "important test bed" for similar projects worldwide, according to BP. In the field, BP said the potential for nearly another 10 Tcf of tight gas resources could be converted to proved reserves over the next 10-15 years if its technologies were successfully deployed.

Now that it has brought the technology to northeastern British Columbia, BP Canada CEO Randy McLeod told Canada's Financial Post in an interview, "you will see some industry firsts there. We will raise the bar and reduce the environmental footprint as much as we can." McLeod said the technology would increase BP's production costs by 20%, but he said the producer would still make money.

Under the proposal, McLeod said BP plans to reduce its well density "by extending the reach of horizontal wells, producing more from those wells, using zero-emission well sites powered by wind turbines and solar panels, using electricity instead of gas to power compressors, and collecting seismic data by using satellites rather than cut lines and big vibrating machines."

BP has some competition across the play. Calgary-based ARC Energy Trust this month identified a resource "greater than 1 Tcf" in two discoveries known as West Dawson and Sunrise, which are west of Dawson Creek, BC. Not included in ARC's estimate is another 13,000 acres of 100%-owned land there that it acquired in late 2007 in the West Tupper area southwest of Dawson Creek and just west of the Swan Lake gas field. All of the lands are considered "highly prospective" for gas in the Triassic Montney formation, ARC Energy said.

ARC Energy entered the area by acquiring Star Oil & Gas in April 2003 and built production to 44 MMcf/d in December 2007 after start-up of the Spectra West Doe gas plant. Its best horizontal Montney wells have tested at more than 10 MMcf/d.

EnCana Corp., Canada's largest gas producer, also will give BP a run for its money in its Cutbank Ridge play in the province, where there is an estimated 4 Tcf of recoverable reserves. In 3Q2007 Cutbank Ridge was EnCana's biggest producer -- with output jumping 47% from the previous year (see NGI, Oct. 29, 2007).

EnCana's key parcels in Cutbank are located between Dawson Creek, Chetwynd and Tumbler Ridge, BC, and the producer has projected it will drill between 100 and 200 gas wells a year there. EnCana also is developing gas in the Greater Sierra play, which is about 400 kilometers north of Dawson Creek. The Greater Sierra is estimated to hold 2.5 Tcf of recoverable reserves.

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