Nexen strengthens position in Northeast British Columbia

Nexen Inc., Calgary, has 100% interest in 126,000 acres in Northeast British Columbia in an emerging Devonian shale gas play that could become one of North America's most significant shale gas plays.

Feb 17th, 2009

By OGJ editors
HOUSTON, Feb. 17 -- Nexen Inc., Calgary, has 100% interest in 126,000 acres in Northeast British Columbia in an emerging Devonian shale gas play that could become one of North America's most significant shale gas plays.

The land position includes 88,000 acres in the Dilly Creek area of the Horn River basin.

Nexen spent $180 million in 2008 to drill, complete, and test wells and build infrastructure. One horizontal well was completed and tied in last winter and is producing at rates in line with expectations and competitor wells. Nexen plans to complete and tie in two wells later this winter. It is building all-season roads.

The company in 2009 plans to enhance its understanding of optimal drilling and fracturing techniques, including by drilling and testing multiple wells from a single pad. Three of the wells are to be drilled and completed by midyear and on production before winter. The other wells will be drilled later subject to favorable economic and financial conditions.

Nexen previously estimated that the Dilly Creek lands contain 3 to 6 tcf of recoverable contingent resource. Further appraisal activity is required before it can finalize these estimates, establish commerciality, and book reserves.

The company said it is cooperating with other operators on building roads, pipelines, and processing facilities to achieve economies of scale and reduce the environmental footprint.

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