* Duvernay, Montney, Muskwa among major formations
* Oil majors are amassing lands to unlock reserves
* Technology, economics will determine what gets produced
By Jeffrey Jones
CALGARY, Alberta, Nov 6 A new study has
identified immense oil and gas resources in Alberta's emerging
shale prospects, suggesting a string of recent takeovers and
land buys will yield impressive production gains for some of the
world's largest oil companies.
The Western Canadian province's shale formations, including
the Duvernay, Montney and Muskwa, could contain 3,324 trillion
cubic feet of natural gas, 58.6 billion barrels of gas liquids
and 423.6 billion barrels of oil, according to the research,
conducted by the Alberta Energy Resources Conservation Board and
Alberta Geological Survey.
The numbers show Alberta, already Canada's largest oil and
gas producing province, has huge potential even beyond its oil
sands. They are currently seen as the world's third-largest
crude deposit with about 170 billion barrels of proven reserves
and ultimate potential of as much as 1.7 trillion barrels.
The Duvernay and Montney have been the targets of a boom in
energy deal-making, with companies such as Encana Corp,
Chevron Corp and Talisman Energy Inc amassing
land positions to unlock its liquids-rich reserves.
Last month, Exxon Mobil Corp agreed to buy Celtic
Exploration for C$2.6 billion ($2.6 billion), locking up its
reserves in both the Duvernay and Montney.
The companies have had success in accessing the previously
tough-to-tap oil and reserves with horizontal drilling and
hydraulic fracturing technology that had been developed in large
scale for use in shale gas formations in the United States and
According to the ERCB/AGS study, the Duvernay, a formation
that cuts across much of north-central Alberta, contains 443
trillion cubic feet of total gas in place, 11.3 billion barrels
of natural gas liquids and 61.7 billion barrels of oil, at the
midpoint of the estimates.
The Muskwa, located in Northwestern Alberta, has an
estimated 419 trillion cubic feet of gas, 14.8 billion barrels
of gas liquids and 115.1 billion barrels of oil.
The Montney, in Western Alberta, is also a major exploration
area in neighboring British Columbia. On the Alberta side,
natural gas resources are estimated at 2,211 trillion cubic
feet, gas liquids at 28.9 billion barrels and oil at 136.3
Others, including the Basal Banff/Exshaw, North Nordegg and
Wilrich formations, have preliminary estimates.
The authors cautioned that the numbers represent "endowment
of hydrocarbons" and that geological and engineering constraints
as well as economic, social and environmental considerations
will ultimately determine the volumes that will be recovered.