Quicksilver Resources Inc. has increased its position in the emerging Horn River Basin of northeastern British Columbia, which is considered one of the most promising new natural gas shale plays in Canada.
EOG Resources Inc. in February announced gas discoveries from three vertical and horizontal wells in the basin, and it has estimated it holds potential reserves of 6 Tcf on 140,000 net acres (see Daily GPI, Feb. 29).
Quicksilver, based in Fort Worth, TX, has acquired 18 exploration licenses that cover 127,000 net acres in the play. More than 500 feet of gross thickness from the Upper Devonian Muskwa and Klua natural shale formations have been identified at depths ranging from 7,800 to 9,000 feet.
"Our new ventures team in Canada has done an excellent job of applying the company's extensive knowledge of unconventional gas reservoirs to identify and acquire these licenses in one of the most exciting emerging basins in North America," said CEO Glenn Darden. "The Muskwa and Klua shales have the right characteristics which we believe can provide a significant resource opportunity for Quicksilver."
Quicksilver, which also explores for oil and gas in the Barnett Shale, West Texas and Rocky Mountains, acquired the licenses in the past five months in two Crown lease sales, paying on average C$655/acre. Up to four wells are expected to be drilled on the acreage during the upcoming 2008-2009 winter drilling season.
British Columbia's take from its last lease sale in March, which included three parcels in the Horn River region, rose to a record C$1.2 billion (US$1.18 billion) because of the growing interest in tapping the abundant gas reserves. Lease sales for the fiscal year that ended March 31 more than doubled the previous record of C$625.7 million, which was set in 2003-2004. Prices also jumped 89% from the previous year to C$1,863/hectare from C$984/hectare.
The three Horn River leases fetched a combined C$51.1 million, the province said. The province offered a total of 81 parcels covering 89,752 hectares.
"These exceptional land rights sales show British Columbia is a top jurisdiction for oil and gas investment," said BC Energy and Petroleum Resources Minster Richard Neufeld. "Our success is the result of first-rate resource potential and strong support for continued industry growth. We have increased our natural gas reserves, expanded infrastructure and attracted new interest to BC that will benefit the entire province for decades to come."
The province's next lease sale is scheduled for April 23, when it will offer 41 parcels covering 26,939 hectares.
©Copyright 2008 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.