Canada’s National Energy Board granted a commercial discovery declaration to Lone Pine Resources Inc., Calgary, with respect to the Upper and Lower Besa River shale intervals in the Pointed Mountain field area of the Liard basin in western Northwest Territories.
“It is reasonable that all of Lone Pine’s 66 sections are developable by the use of hydraulic fracturing,” NEB said, adding that “there are reasonable grounds to believe that the commercial discovery extends at least throughout the applied-for frontier lands.” Lone Pine has a 100% operated working interest in 52,202 acres at Pointed Mountain.
Lone Pine, which applied to the NEB for the CDD in February 2012, now has contacted Aboriginal Affairs & Northern Development Canada for the standard 21-year lease extension in accordance with Sec. 62 of the Canada Oil & Gas Lease Regulations.
In the last half of 2011, Lone Pine reentered and recompleted the L-68 vertical wellbore to test two overpressured uphole shale formations. The L-68 well provided sweet gas flow rate data that support the potential deliverability of 12 MMcfd of gas from a multifractured horizontal completion, Lone Pine figures.
Lone Pine believes this analytical forecast is strongly supported by analogous data from nearby operators in the Liard basin as well as the adjacent Horn River basin. In particular, an Apache Corp.-operated well in Northeast British Columbia 60 miles south of the L-68 well had a 30-day gas flow rate of 21.3 MMcfd from the Lower Besa River.
Independently, Apache said it has identified 48 tcf of dry sales gas from 210 tcf of net gas in place on its acreage (OGJ Online, Aug. 20, 2012).
Lone Pine said existing infrastructure in the area includes roads and pipeline access to the Spectra Fort Nelson gathering system via the Pointed Mountain/Beaver River sour gas pipeline that crosses Lone Pine’s acreage.
The NEB’s CDD also acknowledges that the shale gas intervals “appear to be thicker over the Lone Pine lease area than the equivalent shales in Horn River basin” and further that “the thicker intervals combined with good reservoir parameters contribute to large original gas-in-place resource estimates.”
Lone Pine said the CDD is the first of its kind for an unconventional resource play that has been granted by the NEB.
Consulting engineers engaged by Lone Pine issued best, low, and high estimates of undiscovered shale gas initially in place in Upper and Lower Besa River shales on the company’s Pointed Mountain lands of 20.6 tcf, 14.4 tcf, and 28.4 tcf, respectively. The corresponding unrisked prospective shale gas resource figures are 3.8 tcf, 1.8 tcf, and 7.4 tcf as of Sept. 30, 2012.