Vermilion tags Alberta liquids resource plays

By OGJ editors
HOUSTON, June 3
-- Vermilion Energy Trust, Calgary, said drilling programs in Cretaceous Cardium light oil and gas-condensate resource plays in north-central Alberta will provide “organic production growth for the foreseeable future.”

Vermilion said its holdings in the West Pembina and Drayton Valley areas have grown to 150 net sections that are expected to support more than 426 net locations in the West Pembina Cardium fairway, including at least 15 net Cardium light oil horizontal wells to be drilled in 2010.

Vermilion expects to hike drilling to 30-40 Cardium light oil wells in 2011.

The company has an inventory of more than 120 net locations identified for horizontal drilling, and will see nine gross (6 net) wells drilled in 2010, including four horizontal wells (2.5 net). The wells target the Cretaceous Ellerslie and Notikewin formations that deliver liquids at 40-60 bbl/MMcf of gas and provide strong economics even at current gas prices.

Vermilion has drilled five Cardium wells to date, all completed with 18-stage oil fracs containing 20 metric tons of sand. Seventy of 72 fracs were successfully placed during completion of the first four wells. The wells are roughly 1,800 m deep with 1,250-1,500-m legs in sandstones estimated to be 8 m thick.

The 30-day production from the first three wells, after recovery of the hydrocarbons used in the fracs, averaged 440 boe/d/well, 90% light oil and 10% associated gas.

“Vermilion believes the geological deposition characteristics in West Pembina will provide for highly repeatable results for this play going forward, and plans to double its level of activity in the area for 2011,” the company said.

Vermilion also participated in two horizontal conventional Notikewin gas well completions in the first quarter of 2010, with optimized 30-day average gross production rates of 4.0 MMcfd of gas and 160-200 b/d/well of condensate. Vermilion has identified an inventory of 26 net horizontal conventional Notikewin prospects.

Vermilion will drill and complete its first horizontal Ellerslie well using slick water frac technology late in the third quarter of 2010. The company has previously completed a vertical Ellerslie well using a slick water frac, achieving optimized 30-day average production rates of 2.0 MMcfd and 100-120 b/d of condensate.

Applying slick water fracs to multistage horizontal completions is expected to yield similarly strong performance gains to those achieved with the successful vertical well completion, the company said. Vermilion has an identified inventory of more than 40 net horizontal Ellerslie drilling opportunities.

Vermilion is in the early stages of evaluating the development potential of an emerging unconventional Notikewan resource play through application of horizontal drilling and multistage slick water fracturing techniques. The play has been tested using two operated vertical slick water fracs and one nonoperated horizontal completion.

Vermilion plans to further test and de-risk the play with two to four vertical recompletions and one operated horizontal completion in the coming winter. Vermilion has identified 54 Notikewan resource prospects in the West Pembina area.

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