Shell Canada said Wednesday that it made a major natural gas discovery in Central Alberta. An exploration test well flowed at a restricted rate of about 30 MMcf/d, and Shell Canada estimates there is about 500-800 Bcf of gas reserves in place in the previously untested Leduc reef feature about 19 miles southwest of Rocky Mountain House in Alberta.

The Shell Tay River RicinusW well (Shell Canada 75%, Mancal Energy 25%), was drilled a depth of 16,800 feet encountered 460 feet of net pay. The raw gas contains 60% methane and 35% hydrogen sulphide. Additional drilling and production information will be required to confirm the amount of gas in place and recovery factors.

“Our Foothills exploration team used sophisticated technology and know-how to map, successfully drill and test a new and significant structure in a basin that is generally considered mature,” said Ian Kilgour, senior vice president of exploration and production at Shell Canada. “This is one of the largest gas discoveries in Western Canada in recent years and related economic benefits will be important to both Shell and the Province of Alberta.”

The discovery well is in the vicinity of existing sour gas processing facilities with capacity to handle incremental volumes, and is expected to be tied-in and producing by mid-2005. Further delineation drilling is also planned during 2005.

“The objective of our ongoing exploration effort in the Alberta Foothills has been to find and develop additional gas to maintain production from existing fields, and we’ve had good success with that program over the years,” said Shell Canada CEO Clive Mather. “This significant and exciting new discovery could take us beyond that objective and contribute to the future growth of our natural gas business.”

©Copyright 2004 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.