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Montney Shale Operator Encouraged by Peace River Tests

A recent one-day retest of an Upper Montney Shale well in northeast British Columbia flowed at a rate of 8.9 MMcf/d, which further confirms a "large in-gas resource" at the Peach River Arch area, junior explorer Canada Energy Partners Inc. (CEP) said Monday.

The retest of the Portage c-20-E well flowed with no water and 2,758 pounds/square inch flowing pressure, the producer said.  The c-20-E was drilled early this year and completed in June.

"The well had peak rates during the test of 14.4 MMcf [a day] while still restricted," the BC-based producer noted. "The test was cut short due to safety concerns stemming from extreme cold caused by high, dry gas rates and high flowing pressures."

The well was retested for two reasons, said CEP. The company and its joint venture partner thought the original flow-back test kept the rates below "critical" velocity necessary to efficiently lift water from the well, and "anecdotal observations" from other shale gas plays had indicated "significant" improvement in well performance subsequent to an extended shut-in. The well retest confirmed that, said the company.

The results are "very encouraging in light of the fact that the horizontal length of the c-20-E is 50% of typical Montney horizontal lengths with only 50% of the typical stimulated reservoir volume," said company officials. "A pressure survey also confirmed that the Upper Montney is 41% over-pressured."

The Portage 3-12-82-26 well also has been completed, CEP said. Over a 16-day flow test period, the well, with five hydraulic fracturing stages, had a peak flow rate of 4.5 MMcf/d and an end rate of 1.2 MMcf/d, said CEP. The end rate, it said, may have been "adversely affected by persistent water and sand production and...improved long-term performance is possible."

CEP, which began working in the tight gas play two years ago, said the initial drilling program "has confirmed a large in-place gas resource at Peace River," and further "refinements to drilling and completion practices will progressively result in improved flow-rates and cost efficiencies.

"It is also notable that there remain three untested formations (Doig Siltstone, Doig Phosphate and Lower Montney) that have been deemed commercial by adjacent operators in the area with large confirmed in-place gas resources."

In September the BC Oil and Gas Commission reported that at the end of 2009 the province had an estimated 658 billion cubic meters of remaining raw gas reserves -- the highest level in history and 9% higher than 2008 year-end estimates.

British Columbia has substantial gas and oil reserves in several plays, including the Montney, Horn River Basin (HRB), Cordova Embayment, Liard Basin and Mist Mountain. The HRB, now considered to be the biggest gas resource in the province, may hold 500 Tcf or more, the commission said.

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