Intensive application of improved drilling methods has paid off for an aggressive “junior” among Canadian natural gas producers while highlighting an industry trend of using technology to tap targets previously regarded as beyond economic reach.

Enthusiastic stock markets briefly gave shares in Fairborne Energy Ltd. a boost of as much as 22% after the firm reported flows of up to 13 MMcf/d in production tests of a well in an area of the Alberta foothills of the Rocky Mountains known as Harlech. The gain later settled back to 14% after markets took time to look more closely at the drilling.

Rather than a new discovery that opened an untried geographical frontier, the well stood out as a feat of production technique 3.5 kilometers (two miles) beneath the ground in one of Alberta’s older oil and gas producing regions west of the provincial capital of Edmonton. Achieving the big test flow took eight applications of multistage horizontal fracturing technology across 883 meters (960 feet) of separate geological intervals or rock layers in a complicated formation known as the Nordegg, Fairborne reported.

After the initial excitement Calgary energy shares boutique Peters & Co. circulated a research note that rated Fairborne as a “sector perform” or average prospect among gas juniors over the next 12 months.

“These wells are not for the faint of heart, costing slightly in excess of C$9 million [US$8.5 million] per well, with the key and unknown determinant in calculating well economics being the production decline profile,” Peters said.

Daily output can shrink by more than half within a year of putting Nordegg wells into production, the investment house indicated. “The Nordegg (named after an Alberta coal-mining pioneer) is a complex and highly variable reservoir, with the key determinants for economics being both the decline profile and the initial on-stream production rate.”

Horizontal drilling technology combined with intensive use of hydraulic fracturing generates a 10-fold increase in production over conventional vertical wells, Fairborne said.

The firm has made a specialty of using technology on difficult formations previously left alone by the Alberta industry. In a 58-square-mile foothills mineral rights spread bought from BP, Fairborne reports increasing daily production from almost zero to nearly 12 MMcf of gas plus 900 bbl of liquid byproducts.

The BP legacy properties, while not the extremely tight variety known as shale gas, were also a complex technical challenge “characterized by numerous stacked reservoir horizons” up to 3.5 kilometers (two miles) deep and “commonly over-pressured,” Fairborne has told its stockholders.

TransCanada PipeLines, keeping close tabs on gas-field operations due to its ownership of Alberta’s Nova gathering pipeline network, has repeatedly reported a qualitative change is under way in supply development. Activity is migrating away from picked-over shallow, small drilling targets on the plains of eastern Alberta and western Saskatchewan to deeper or more technically difficult but always bigger sources along the Rockies foothills of in western Alberta and northeastern British Columbia.

The trend also shows on a technical scorecard kept by Peters. The average number of days spent on western Canadian wells by drilling rigs is on the rise.

So far this year, contractors have averaged more than eight days per well, up from about seven last year and a low of less than a week at the height of a shallow plains drilling boom in 2004. The trend shows most strongly in B.C., where since 2006 the amount of industry time invested per well has climbed 43% to more than 18 days so far this year from about 12 and a half in 2006.

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