New assessment targets marketable oil and gas resources in Alberta's Duvernay Shale region

CALGARY, Sept. 26, 2017 /CNW/ - The National Energy Board (NEB), together with the Alberta Geological Survey (AGS), today released a new resource assessment for the Duvernay Shale in central Alberta that adds significant quantities of marketable light oil resources in the province as well as natural gas and natural gas liquids (NGLs).

Using geological and in-place hydrocarbon data provided by the AGS, the NEB estimates the Duvernay Shale contains 3.4 billion barrels of marketable light oil and field condensate, or 17 years of Alberta's annual production. It also shows marketable gas resources equivalent to nearly 25 years of Canada's annual consumption.

The Duvernay Shale covers nearly 20 per cent of the province, stretching from just below Grande Prairie to just north of Calgary and east of Edmonton. Companies have been drilling the Duvernay for shale gas and oil since 2011, and the region has extensive existing pipeline infrastructure.

Deposited about 370 million years ago, the Duvernay Shale is rich in organic matter and ranges from about one kilometre to more than five kilometres deep. The Duvernay generally starts getting prospective for oil and gas production below 2.5 km, with the formation generally oily in areas shallower than 3 km and gassier in areas deeper than 3 km.

Although most of current development has focused on the Duvernay's West Shale Basin, such as the Kaybob Field northwest of Edmonton, recent provincial land sales show increasing industry interest in the Duvernay's East Shale Basin.

A resource assessment of a formation's marketable petroleum estimates the total amount of sales-quality oil, natural gas and even NGLs that can potentially be recovered from a formation with existing technology. Resource assessments are based on a number of factors such as the geology of the reservoir and production from existing wells.

The NEB will be releasing a second report later this fall examining the economics of the Duvernay Shale resource.

Quick facts:

• The assessment determined that the Duvernay region has the potential to produce 3.4 billion barrels of marketable crude oil, 6.3 billion barrels of marketable NGLs and nearly 77 trillion cubic feet (Tcf) of marketable gas.
• Canada consumes about 3.1 Tcf of natural gas per year, making the Duvernay Shale's gas resources equivalent to nearly 25 years of Canada's annual consumption.
• Alberta produced 550,000 b/d of light oil and condensate in 2016, making the Duvernay Shale's light oil and condensate resources equivalent to 17 years of current provincial production levels.
• For perspective, there are 165 billion barrels of oilsands reserves still remaining in northern Alberta.
• The Duvernay Shale is rich in condensate, which is like a very light crude oil. However, condensate sells at a premium price to light crude oil because of high demand from the oilsands, where condensate is mixed with bitumen so that it can more easily flow through oil pipelines.
• Field condensate is recovered at a well site. Other condensate is recovered at gas-processing plants, where it is often called pentanes plus.

Quote:
"This new assessment further solidifies our understanding of the extensive – and increasingly abundant – natural gas and oil resources in Alberta. Studies like this one also demonstrate the collaboration between the NEB and other government agencies. And they enable all governments to be better informed when building policy around resource development and energy markets."

-       Peter Watson, Chair & CEO, National Energy Board.

Associated links:
Duvernay Resource Assessment - Energy Briefing Note

The National Energy Board is an independent federal regulator of several parts of Canada's energy industry. It regulates pipelines, energy development and trade in the public interest with safety as its primary concern. For more information on the NEB and its mandate, please visit www.neb-one.gc.ca

The Alberta Geological Survey (AGS) is a branch of the Alberta Energy Regulator (AER) and provides geological information and advice to the Government of Alberta, the AER, industry and the public to support responsible exploration, sustainable development, regulation, and conservation of Alberta's resources.

SOURCE National Energy Board