The discovery of the Horn River Basin in northeastern British Columbia (BC) brought with it a lot of hype, but drilling results are beginning to indicate that the natural gas play may be as prolific as explorers first suggested.

Quicksilver Resources Inc.’s first completed well in the basin tested at an initial production rate of 13 MMcf/d and has averaged 10 MMcf/d in the first month of production, the company said Monday.

Initial drilling confirmed a gas-producing zone of more than 500 feet of net shale thickness in the Muskwa and Klua/Evie shale formations at a vertical depth of 9,000 feet. The initial horizontal well, the D-50A, was drilled into the Muskwa with 3,500 feet of lateral (horizontal extension) and 10 fracture (frac) stimulation stages. A second well has been drilled and completion is scheduled later this year.

“As we proceed with this project, we anticipate drilling longer laterals with additional stages of fracture stimulation, which we expect will result in even greater production volumes per well,” said CEO Glenn Darden. “It is becoming clear from mapping, core analysis and production results that our substantial acreage position is in a very good part of the basin and contains the potential for multiple trillion cubic feet of recoverable natural gas resources for Quicksilver.”

The Fort Worth, TX-based producer acquired 19 exploratory licenses covering 127,000 acres in the basin two years ago. Under BC leasing rules, Quicksilver is required to drill eight more exploratory wells during the next three years to validate the licenses. Once it obtains the licenses, the company has to drill about 80 development wells over a 10-year period to secure the land rights.

Quicksilver, which already partners with Italian producer Eni in the Barnett Shale, is looking for a joint venture partner to help develop its Horn River prospects, Darden said last month (see Daily GPI, Aug. 11).

Calgary-based Nexen Inc., which was one of the first to ballyhoo the basin’s gas potential (see Daily GPI, April 24, 2008), said it also is making progress in the BC basin after completing a recent three-well drilling and completion program. With five shale gas wells now onstream, Nexen is producing 15-20 MMcf/d “with the majority of production coming from the three new wells.” The land position “could support 500 to 700 wells,” the company said.

According to Nexen, the drilling and completion program was able to save money by taking advantage of improved equipment use, which allowed deeper wells and more fracs per well. Among other things, Nexen said it maintained an industry-leading frac pace of 26 fracs in 15 days. Two of the wells were completed with eight fracs; a third was completed with 10 fracs.

“We are making excellent progress in reducing costs and increasing well productivity on our Horn River shale gas acreage with more upside still to come,” said Nexen CEO Marvin Romanow. “We are currently in the process of developing a winter drilling program that will continue to advance our understanding of this resource and allow us to make more progress on costs and well productivity. We view the Horn River basin as one of the largest and most prolific shale gas plays on the continent, an observation with which many others agree.”

Nexen has 88,000 acres in the Dilly Creek area of the Horn River Basin with a 100% working interest. Reserves are estimated at 3-6 Tcf “of contingent recoverable resource, which could double our existing total proved reserves.” Appraisal activity is ongoing to finalize the estimates and establish the play’s commercial viability, Nexen said.

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