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UPDATE 1-Imperial will not confirm Canadian shale gas rates

Thu Jul 9, 2009 6:19pm EDT

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(Updates with comment from Exxon)

CALGARY, Alberta, July 9 (Reuters) - Imperial Oil Ltd (IMO.TO), which is exploring a big shale gas play in British Columbia, declined to confirm comments by its partner on initial production rates that were reported in the Wall Street Journal.

Imperial and Exxon Mobil Corp (XOM.N) are 50-50 partners in the Horn River region of northeastern B.C., where several companies are operating and have touted potential reserves in the trillions of cubic feet.

Exxon's global exploration head told the Wall Street Journal that initial rates have been in the range of 16 million to 18 million cubic feet a day, on par with the prolific Haynesville shale play in Louisiana.

But Exxon said in a statement sent by email that the wells cited in the Journal's story were not production wells, only test wells that "did not flow anywhere near the stated rates."

Imperial spokesman Pius Rolheiser would not confirm those numbers, but pointed out the partners acquired eight more blocks of land in the June 17 British Columbia government land sale.

Exxon is the majority owner of Imperial, with a 69.6 percent stake.

Rich unconventional gas prospects in North America have kept the industry excited about the future of supply, but a current glut of gas due to the recession has pressured prices and reduced drilling activity. (Reporting by Jeffrey Jones; editing by Rob Wilson and Andre Grenon)



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