CALGARY, Alberta (Reuters) - Nexen Inc NXY.TO shares surged as much as 6.3 percent on Wednesday after the Canadian oil explorer revealed drilling results from its land holdings in the country's hottest new natural gas region.
Nexen shares were up 62 Canadian cents at C$36.60 at midmorning on Wednesday on the Toronto Stock Exchange after reaching as high as $38.25.
The company said its Dilly Creek lands in the Horn River Basin in northeastern British Columbia could contain as much as six trillion cubic feet of natural gas.
“We estimate our Dilly Creek lands contain between 3 and 6 trillion cubic feet of recoverable contingent resources,” Nexen said in a release. “Further appraisal activity is required before these estimates can be finalized and commerciality established.”
Other players in the region have also reported big gas finds on their properties. Indeed, EOG Resources Inc EOG.N said earlier this year its Horn River holdings could yield as much as 6 trillion cubic feet of gas, while EnCana Corp ECA.TO and Apache Corp APA.N have also reported good results.
The region’s shale rock is yielding vast gas reserves and is being compared favorably with the big Barnett shale region of Texas.
“Nexen indicates that that the shales are approximately ... 50 percent thicker than the prolific Barnett shale play,” Andrew Potter, an analyst at UBS Securities wrote in a note to clients.
Nexen said it has 123,000 acres in land in the Horn River Basin, a region it said “the potential to become one of the most significant shale gas plays in North America.”
Reporting by Scott Haggett; Editing by Peter Galloway
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