Edmonton, Alberta,
11
January
2017

Big Possibilities for a Big Play

Report shows Duvernay Formation has serious resource potential

The potential is massive, but the question is, can all of it be tapped?

The Alberta Energy Regulator (AER) recently published an independent assessment of what’s contained within the Duvernay Formation, a swath of rock beneath the earth’s surface that stretches from Alberta’s foothills eastward across the north-central part of the province.

Based on data from a 2012 Alberta Geological Survey study, the report indicates the total in-place resource for the Duvernay ranges from 353 to 540 trillion cubic feet of natural gas, while natural gas liquids is estimated to be 8 to 16 billion barrels (bbls) and oil 44 to 83 billion bbls.

These are huge volumes, but does that mean all of it can be developed? It depends.

“What this report does is provide an estimate of what’s there that can reasonably recovered in the next 30 years,” says Krista Beavis, a reservoir geologist with the AER. “But what’s recovered or developed depends on a number of factors, like drilling and completion optimization, costs, commodity pricing, social, environmental and regulatory constraints.”

Knowing the unknown

Reserves vs. resources, what’s the difference?

The terms “resource” and “reserve” are often used interchangeably, but have technically different meanings. Generally speaking, resources are those deposits of petroleum that are known to exist, including all estimated amounts yet to be discovered. In the Duvernay report, resources that could be developed in the next 15 years are further classified as “contingent,” and resources that could be developed in the next 30 years are classified as “prospective.” Reserves, on the other hand, are estimates of remaining amounts of petroleum that are expected to be recovered from known accumulations, depending on the technology available.

How much oil and gas is locked inside a number of Alberta’s geological plays isn’t well known or reported. The AER is working to provide that information more transparently to everyone.

The Duvernay is a relatively new area of development for the province. Since 2011, it has seen more and more multistage horizontal wells. To the end of 2015, more than 221 gas wells and 21 oil wells were drilled.

“This is actually quite a large swath of land,” Beavis says. “It covers an area of approximately 130 000 square kilometres of land, or about 20 per cent of Alberta.”

And due to its close proximity to the Alberta’s oil sands, the liquids-rich area of the Duvernay is positioned for growth. Condensate (a liquid) is used to dilute the thick bitumen that is pulled out of the oil sands for ease of transport in pipelines.

While this is the first report of its kind, the AER plans to release additional data for the Montney and Cardium formations.

These formation-specific reports are in addition to the AER’s annual Alberta’s Energy Reserves and Supply/Demand Outlook, which provides an overview for the entire province.

“This information is very helpful for industry, for investors, but also for communities; it gives them an idea of what’s below the surface and the potential for development,” adds Beavis.

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photo:Carrie Rosa
Carrie Rosa
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