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Quebec Utica shale gas development eyed

By OGJ editors
HOUSTON, Apr. 2 -- Forest Oil Corp., Denver, plans to drill three horizontal wells this year in an emerging play for gas in Ordovician Utica shale in Quebec's St. Lawrence Lowlands.

The company assigned a net recoverable resource potential of 4.1 tcf to its 269,000 net acreage position on a gross 339,000-acre spread. The leases have 10-year primary terms.

Forest anticipates first production in 2009 and the possibility of a full-scale drilling program in 2010 and after. The 2008 wells will have 2,000-ft laterals and four fracs per well.

The company's 269,000 net acres is under lease or farmout near Trois-Rivieres and north of Montreal. Forest drilled two vertical wells in 2007 to 4,800 ft and production-tested gas at rates as high as 1 MMcfd.

About 70% of the gross acreage position is deemed prospective, and the 4.1 tcf recoverable estimate is based on a 20% recovery factor at 93 bcf/sq mile.

Forest said the Utica shale, which has at least two prospective horizons, averages 500 ft thick at 2,300-6,000 ft. Most of the shale's rock properties are similar to those of the Barnett shale in North Texas.

The company noted that a 24-in. gas pipeline runs between Montreal and Quebec City and a 20-in. line crosses the St. Lawrence River at Becancour, Que. Multiple distribution lines also lace the area.

The Utica gas analyzes 88-97% methane with less than 1% inerts and heating value of 1,027-1,136 Btu/Mcf. The gas could fetch a border price of a $1.05 premium to the New York Mercantile Exchange and, if sold in Quebec, back out gas now shipped from Alberta.

Among the Canadian companies that hold acreage in the play are Gastem Inc., Montreal, Junex Inc., Quebec City, and Questerre Energy Corp. and Talisman Energy Inc., Calgary.

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