Using current high natural gas drilling activity as a determining factor, Canada’s National Energy Board (NEB) projected in its latest Energy Market Assessment (EMA) that deliverability from the Western Canada Sedimentary Basin (WCSB) will be flat to slightly lower through 2005, with production maintained at the current level, which is about 16 Bcf/d (450 million cubic meters).

NEB’s EMA on Short-Term Natural Gas Deliverability from the WCSB reviews historical production and drilling activity and also provides an outlook for the period 2003-2005.

NEB chairman Ken Vollman noted that “the high decline rate associated with production from existing gas wells and the trend of decreasing productivity in new gas wells, as indicated in this report, present challenges to maintaining production levels from the WCSB. However, with market forces driving record levels of drilling and the development of increasingly diverse resources, the board expects that production from new gas wells will largely offset decline is existing gas wells and keep overall basin deliverability close to current levels for the next two years.”

According to the NEB, the overall rate at which production is declining from currently producing connections is a major factor in the deliverability expectations from the basin. NEB estimates that since the end of 2002, the overall annual decline rate of gas production from all well connections producing is estimated to be 22.8%. “At this rate of decline, and at marketable production of approximately 462 million cubic meters (16.3 Bcf) per day, the reduction in deliverability due to decline in currently producing wells for a one-year period is about 94 million cubic meters (3.3 Bcf) per day. In other words, producers must drill to replace this large volume just to maintain overall deliverability from the basin.”

The report found that deliverability additions — because of new gas well connections — have been roughly equal to the decline in deliverability of older gas well connections, resulting in a relatively flat production profile for the WCSB since 1998. However, the average productivity of new gas well connections in the WCSB has been decreasing over the past six or seven years, and as a result, an increasing number of connections have been needed to keep the profile flat.

“Simply, it is more challenging with each passing year to develop new gas production to offset annual decline from older wells,” the NEB stated. “The board’s analysis recognizes a trend of decreasing productivity in new gas well connections, which is expected to continue in most areas of the WCSB over the 2003 to 2005 period.”

Using an expectation that high drilling rates would continue, NEB estimated that new gas well connections will total 14,400 in 2003, 13,850 in 2004 and 12,850 in 2005. Under this scenario, NEB projected WCSB deliverability will be 16.2 Bcf/d (460 million cubic meters) by the end of this year, and would be flat at 16.2 Bcf/d (458 million cubic meters) by the end of 2004. By the end of 2005, deliverability is forecast to drop slightly to 15.8 Bcf/d (448 million cubic meters).

“Over the next two years the board expects that gas well development and performance will generally follow the historical trends. However, changing market conditions and advances in technology can have a significant impact on producing trends. The board will continue to monitor production trends in the WCSB and release reports from time to time.”

To view the complete EMA report, visit the web site at

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