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Delphi Energy starts Alberta Montney gas-liquids flow

Delphi Energy Corp., Calgary, started Montney gas-liquids production on May 13, 2012, its 30 MMcfd compression and dehydration facility at Bigstone East northwest of Edmonton, Alta.

Production volumes from the company’s two wells in the first week reached a combined gross 12 MMcfd of gas and 660 b/d of wellhead condensate on May 20.

Production from the first Montney horizontal well with a surface location of 1-19-60-22 w5m has been progressively increased since May 13 to 6.3 MMcfd of raw natural gas and 330 b/d of wellhead condensate on May 20. With a shallow-cut gas plant NGL yield estimated at 32 bbl/MMcf, the total liquids yield is 84 bbl/MMcf with 70% being plant and wellhead condensate. Since recovering 100% of the frac oil 6 days ago the well has averaged 5.9 MMcfd and 425 b/d of wellhead condensate. Delphi has 100% working interest.

Production from the second Montney well with a surface location at 5-14-60-23 w5m, 3 miles southwest of the first well, has also been progressively raised since May 16 to 5.6 MMcfd of raw gas and 330 b/d of wellhead condensate on May 20. With a shallow-cut gas plant NGL yield estimated at 32 bbl/MMcf, the total liquids yield is 90 bbl/MMcf with 72% being plant and wellhead condensate. The well has recovered 84% of its frac oil. Delphi has 75% working interest.

The company will to produce the wells at variable rates and pressures over the next few months to evaluate and optimize production rates and wellhead condensate yields.

A third horizontal well, with 100% working interest, at 5-14-60-23 w5m, has been rig released after reaching a planned total depth of 5,119 m with 2,238 m of horizontal hole. Completion operations of this third Bigstone East well will commence after spring break-up.

The new facility and infrastructure provide Delphi with the capacity to fully develop the existing Bigstone East land base and generate processing revenue from excess capacity. The facility has been designed to be readily expanded in 15 MMcfd increments to handle increased company and third party volumes.

Delphi has begun a feasibility study to integrate the new facility with its ownership in the existing 80 MMcfd sweet natural gas processing plant to create the lowest possible cost structure and best NGL recovery efficiencies.

The Bigstone East Montney project provides a large inventory of economic projects in the current commodity price environment with current field netbacks of approximately $30/bbl of oil equivalent. Delphi’s three extended reach horizontal wells and existing vertical well tests have efficiently evaluated eight sections of land.

With competitor drilling activity all around the company’s 18 gross (14.75 net) sections, the remaining 30 net Montney horizontal locations identified at Bigstone East have been largely derisked. The company had only 1.7 net Montney drilling locations booked at Bigstone East in the independent engineering report at Dec. 31, 2011, with associated proved and probable reserves of 2 million boe.


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