Alberta Energy Co. Ltd.'s AEC Oil & Gas partnership said it could recover 25-50 million bbl of oil ultimately from lands it acquired in April on the active Suffield Military Range in southeastern Alberta.
AEC, Calgary, paid $63 million for 200,000 acres of deeper oil and gas rights, some 70% of the Crown lands offered.
The company has added $260 million to its planned capital expenditures on the range the next 2 years for the drilling of 1,000 gas wells and 130 horizontal wells.
Drilling on the lands just acquired will help sustain the company's 190 MMcfd of gas production at Suffield and could double its existing 16,000 b/d of oil production on the range within 5 years, said Randy Eresman, president.
AEC has been operating at Suffield for 25 years, and the acquired lands are near infrastructure that will help minimize operating costs. The range lies near the northwestern edge of the Williston basin.
AEC operates more than 3,700 gas wells and 570 oil wells there. It also controls AECO C Hub, North America's largest independent gas storage facility, and a 125 km, 200 MMcfd gas pipeline that transports area gas to TransCanada PipeLines' mainline at Burstall, Sask.
Operators are required to coordinate their work on the property with Suffield Industry Range Control Ltd. (Range Safety), an independent private company, and much of CFB Suffield is subject to restricted access due to military operations each year.
As pioneer operator at Suffield, AEC developed and manages range safety and has agreed to incorporate its personnel and range control systems into Range Safety. Range Safety will maintain the high standards that have been in place for many years to safely control activity on the range. AEC and other operators who acquired deep rights will follow these procedures.
AEC has developed special expertise and equipment to handle the co-existence of oil and gas and military activity, including underground "caissons" to house wellheads and protect them during training exercises.
AEC is Canada's largest and North America's sixth largest seller of gas.
