The Montney Unconventional Play Alberta & British Columbia, Canada TPH Hotter N Hell Conference June 19, 2014
Executive Summary MONTNEY PLAY WHY DO YOU CARE Where is the Montney 2.8 Bcf/D & growing rapidly Western Canada (Alberta, BC) US9 billion/year in wells & mid-stream Surprisingly unknown outside of Adding 1+ Bcf/D per year Canada Tied…
Montney is a World-Class Play Over 4,200 Tcf & 141 billion bbl oil of resource 449 Tcf gas recoverable 14.5 billion bbl NGLs recoverable 1.1 billion bbl oil recoverable Unconventional Montney only From Canadian National Energy…
Montney Unconventional Play BC AB Conventional Conventional play has been developed for years, mostly in Alberta Good reservoir quality Unconventional Oil and gas Fractured/Faulted Conventional and Unconventional hz. play started…
Montney Production Growth Gas Ramp-Up in Full Swing Oil Ramp-Up Just Getting Started Unconventional Montney Gas Wells Unconventional Montney Oil Wells Alberta: 599 Alberta: 639 British Columbia: 1,603 British Columbia: 22 Total:…
Montney Activity Level Montney Drilling Rigs Montney Producing Wells Unconventional Montney Wells Added per Month Current Drilling Rig Count BC Hz Ab Hz Total Drilling Rigs Running: 65 57 122 Wells/Rig/Year: 10 9 9.5…
Montney Wells Have a Shallow Early Decline Rate Why shallow Montney decline rates Probably due to enhanced permeability due to natural fracturing in low-porosity areas Some areas have better permeability due to almost-…
Montney is a Thick Formation Eagle Ford Log 3 plays in one Gamma Ray Upper Density Porosity Middle Neutron Porosity Lower Both Logs Printed on same vertical scale and porosity scales Up to 1,000 feet thick Montney Log TVDs:…
Montney Industry Trends Drilling Completions Surface casing setting depth reduced from 2,000 Open hole ball drop emerging as preferred feet to 1,000 feet to plug & perf Saves about US100,000/well Less expensive + better wells Drill…
Completion Design Is Changing Old Perf & Plug Cemented casing in lateral 8 - 9 stages 3 to 4 perf clusters per stage OLD Water Per Stage: 9,500 bbls Plug & Perf Per Well: 85,500 bbls 9 stages Sand Per Stage: 275,000 lbs Per…
Competitive Insights Ownership Product Prices Provinces own the vast majority of mineral rights Gas prices tend to trade at a US0.50/Mcf Leases obtained through monthly sealed-bid discount to Henry Hub, but basis is volatile auctions…
BC Montney M&A Activity 2010 2013 8 acquisitions: US8.1 billion US2,000 - US34,000 per acre (avg. US8,200) Some with production, some without At a discount to JVs 5 JVs: US6.5 billion US13,000 - US38,500 per acre (avg. US20,000)…
LNG Export Potential Impacting Activity 10+ projects proposed, 20+ Bcf/D exports Current Canadian production is 12 Bcf/D, BC is 3.4 Bcf/D LNG proponents include Petronas, Shell, Chevron/Apache, Nexen/CNOOC, ExxonMobil, BG Group,…
Aggressive Plans in Place for BC Horn River LNG Exports to New Markets Petronas appears to be frontrunner BC Montney Final Investment Decision (FID) planned for Dec. 2014 Prince Rupert Route, Alliance Pipeline TransCanada to…
UGR Blair Creek Assets and Observations UGR Lands 16
UGR Blair Creek Lands Are In an Active Area UGR lands in three blocks Jedney Town Beg Jedney 69,900 net acres 32 rigs running in local area (pre-breakup) Beg 60 Miles 25 PRQ 1 Shell 2 Painted Pony 1 UGR Blair Creek 1…
UGR Blair Creek Asset Summary 69,918 net acres 65,041 ac undeveloped 27 Tcf OGIP, 7-9+ Tcf recoverable 1,200+ net locations at 175-acre spacing (1,300 foot lateral spacing) December 31, 2013 reserves report 1.2 Tcfe reserves…
UGR Montney Reserves Growth 19
Recent Ball Drop Completions = Better UGR Wells Nine of the top 10 BC Montney wells used the Ball Drop completion method Based on 3-month cumulative production 1,519 well data set Top 8 wells all use ball drop system The nine…
Liquids-Rich Gas at Beg/Jedney Liquids generally increase to the NE Working on short- and long-term processing solutions Limited dew point control in the south NGL extraction in the north C5+ receives a premium to oil pricing…
Two-Year Plan Increase Production & Cash Flow Increase production from 20 to 100+ MMcf/D Mostly in the south, pipeline constraints in the north until 2016 Add 31 net wells by spring 2016 US250 million dollar capital plan for wells…
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