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Encana says Horn River ranks high as shale-gas find
CALGARY, Alberta, Sept 9 |
CALGARY, Alberta, Sept 9 (Reuters) - The Horn River shale-gas region in a remote corner of northern British Columbia could hold as much as 500 trillion cubic feet of natural gas, EnCana Corp (ECA.TO) said on Wednesday, placing the find among North America's biggest discoveries.
Data from companies operating in the region, including partner Apache Corp (APA.N), EOG Resources Inc (EOG.N) and Devon Energy Corp (DVN.N) and others, shows the Horn River play ranks among the largest gas finds in North America as exploration in the region firms up its potential, Mike Graham, EnCana's executive vice-president, said at an investment conference.
"We think there is probably 500 (trillion cubic feet) of original gas in place in the basin," he said. "It's a big basin."
At 500 tcf, Horn River ranks third among the big shale finds that have revolutionized North America's natural gas industry.
According to an April report from the U.S. Department of Energy, only the Haynesville shales in Louisiana and Texas, with 717 tcf of original gas in place, and the Marcellus shales, centered in Pennsylvania with 1,500 tcf of gas, are larger than the Horn River discovery.
Only a fraction of the original gas in place is eventually produced from shale discoveries. Some estimates have said as much as 110 trillion cubic feet could eventually flow from Horn River while the Department of Energy pegged recoverable resources from Haynesville at 251 tcf and 262 tcf for Marcellus.
Shale gas discoveries have changed the face of the North American gas supply picture in recent years, boosting production using expensive new technologies even as natural gas prices fall to multi-year lows.
Graham said EnCana and Apache have drilled about 40 wells on their Horn River lands in the northeastern corner of British Columbia, with the latest producing initially producing 8 million cubic feet and declining to 4 million cubic feet per day after a year.
"That's a very, very good decline rate," Graham said. "Some of these big shale plays come off hard, 80 or 90 percent in one year. The Horn River is a bit different, it's got better geology and only declines 50 percent in a year."
As yet there is little gas being produced from the region, though Spectra Energy Corp (SE.N) and TransCanada Corp (TRP.TO) are planning new or expanded lines to carry Horn River gas to market.
EnCana shares rose 63 Canadian cents to C$57.61 on Wednesday afternoon on the Toronto Stock Exchange. ($1=$1.08 Canadian) (Reporting by Scott Haggett; Editing by Frank McGurty)
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