Murphy Oil Co., lifting a veil of secrecy that has hung over ahot drilling play for a year, told the National Energy Board itexpects to achieve production of up to 310 MMcf/d in northeasternBritish Columbia this year.

The Calgary subsidiary of its namesake in Arkansas disclosedthat its best find in the area to date, Ladyfern, is just part ofan aggressive development campaign in a prolific area within easyreach of markets. Even if the program only turns out to be anaverage or “mean-case” performer, Murphy projects production of 172MMcf/d this year.

The Ladyfern discovery well — a site titled a-097-H, is about80 miles north of Fort St. John — and is capable of sustainedproduction at a rate of about 100 MMcf/d, Murphy told the NEB. Theoutput is being held down to about three-fifths of potential bylimited equipment and an associated production restriction enforcedby the B.C. Oil and Gas Commission. The company said it willinstall better equipment and apply for an increase in the”allowable” or permitted flows. Unlike prospects in Alaska and theMackenzie Delta-Beaufort Sea region, the Ladyfern play is withinimmediate reach as a discovery on a technical rather than ageographical frontier.

The discovery is a new pool found in complex geology in awell-established production area, using advanced methods such as3-D seismic. The region is a long day’s drive northwest of Calgary,and is within reach of both the Westcoast and TransCanada-Novapipeline systems in B.C. and Alberta. Ladyfern appears to rankamong the best wells ever drilled by the Canadian industry, aspotentially a match for the stellar discovery that a group led byChevron Canada Resources put into production last year at FortLiard in the southwestern Northwest Territories. Plans that Murphyoutlined to the NEB call for 17 wells, including eight at Ladyfernand nine in a nearby location called Foxglove-Chinchaga. Five wellsin the program are “step-out exploration” probes into the samegeological feature as the Ladyfern discovery well.

Murphy disclosed its drilling results and plans — afterkeeping them secret for a year in order to secure more property inthe area without attracting rivals — to support an application tothe NEB for permission to build a new pipeline. The proposalhighlights the immediate value of the northern B.C. discoverycompared to arctic and offshore targets that have becomefashionable over the past year of rising gas prices and projectionsthat markets will stay tight.

Murphy’s plan calls for connecting its discovery area to anestablished, under-used processing plant called Hamburg operated bya drilling partner, Apache Canada Ltd. The project involves laying11 miles of pipeline for C$4.2 million (US$3 million). The NEB hasbeen drawn into the case, with hearings scheduled to start Thursday(Feb. 15) in Calgary, because the line crosses the B.C-Albertaboundary. While Murphy and Apache have recorded the mostspectacular results to date, they are not the only companies in onthe northern B.C. drilling play. Others active in the area includeAlberta Energy Co. and Ricks Nova Scotia Co., a Canadian arm ofOklahoma-based Ricks Exploration Inc. The NEB in late Decembergave Ricks approval to build a pipeline from its target zone in theLadyfern area into Alberta, provided the company does as well asexpected with a drilling program this winter. Murphy, meanwhile,cleared a hurdle on the eve of hearings on its proposal.

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